WASHINGTON, D.C., November 18, 1998 --- The International Finance Corporation today signed financing agreements for US$5.1 million for a nationwide GSM (Global System for Mobile Communications) digital cellular telephone network in Zambia.
Zamcell Limited will undertake the $16.9 million project to develop, install and operate the cellular phone system. IFC will provide an equity investment of $600,000 as well as a $4.5 million senior loan for its own account and has mobilized $4.5 million in additional debt financing from the Development Bank of Southern Africa (DBSA), a South African development finance institution which operates in the Southern African Development Community.
Zamcell was awarded a 15-year license in 1998 by the Zambian Ministry of Communications, and will be one of two private cellular companies operating in the country. Its shareholders are Mobile Systems International Cellular Investments (MSI Cellular) of the Netherlands, Mitsui & Company, Limited (Mitsui) of Japan and IFC. MSI Cellular is part of Mobile Systems International, a U.K.-based consultancy specializing in cellular network design and engineering. It invests in and operates cellular networks worldwide, including in Uganda, Egypt, China, and India. Mitsui is one of the world's largest business enterprises and has investments in over 30 mobile telecommunications companies globally.
Mr. Declan Duff, IFC Director of Telecommunications, Transportation and Utilities, who signed the agreement for IFC, said that with only nine phones lines per 1000 people in Zambia, there was clearly a tremendous need for additional telecommunications services which Zamcell would help fill by providing a reliable and efficient network. This first IFC investment in the Zambian telecoms sector would contribute to the upgrading of the country's infrastructure while encouraging more private initiatives, he added.
IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses. To date, IFC has invested $2.3 billion in telecommunications projects worldwide, of which $1 billion was for IFC's account.
