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IFC APPROVES US$77 MILLION FOR TELECOMMUNICATIONS PROJECT IN POLAND

WASHINGTON, D.C., Nov. 2 -- The International Finance Corporation (IFC) signed an agreement to provide up to US$77 million in financing for Sprint R.P. Telekom, which plans to build a modern digital telecommunications network in the Pila and Silesia regions of Poland through its majority-owned subsidiaries, Telekom Pila and Telekom Silesia. The IFC financing consists of a US$7 million equity investment, a US$25 million loan for IFC's own account, and an additional US$45 million loan syndicated with other financial institutions. The syndicated loan will be provided by a consortium of European banks comprising ING Bank, ABN-AMRO Bank, Creditanstalt, Dresdner Bank, Societe Generale, Credit Lyonnais, and Credit Suisse. The total cost of the project is estimated at US$165 million. The project sponsors are Sprint International, a subsidiary of Sprint Corporation, and R.P. Telekom, a local Polish telecommunications company. Sprint will be in management and operational control of the operating companies, Telekom Pila
and Telekom Silesia, and will own 25 percent of the equity of Sprint R.P. Telekom. R.P. Telekom and IFC will own respectively 41.67 percent and 11.67 percent of the equity. "The Government of Poland has embarked on an ambitious plan to modernize and liberalize the telecommunications sector by inviting private sector participants, and IFC is pleased to be involved in one of the first private sector telecommunications projects in Poland," said Mr. Everett J. Santos, Director of IFC's Infrastructure Department. When completed in 1997, the network will have 125,000 lines, mainly in suburban and rural areas where the current telephone penetration is low. The network will employ state-of-the-art all-digital technology, including digital switching, broadband "fiber to the curb" fiber optics and SDH ring architecture. The network will also be capable of providing value-added services such as call waiting, call forwarding, and voice messaging, as well as cable television service. IFC is the private sector arm of the
World Bank Group and is the largest source of multilateral financing for private sector projects in developing countries.