WASHINGTON, D.C., October 16, 2000
-- The International Finance Corporation will invest in the start-up of a cellular phone company in Morocco that brings new access to customers and new competition into Morocco's telecommunications sector. In the largest telecoms project financing package to date in North Africa, IFC will invest a total of EUR 450 million equivalent (about US$396 million) in Médi Telecom (Méditel).
Méditel was awarded a 15-year license in August 1999 to operate the second nationwide cellular phone network in Morocco, using the GSM 900 technology standard. The license guarantees that no third terrestrial cellular license will be awarded before August 2003.
The IFC investment will support construction of a national cellular network together with Méditel's own transmission infrastructure. The network's coverage is expected to expand to about 80 percent of the population by December, with over 95 percent coverage by mid-2002. The company launched its cellular service at the end of March 2000 and expects close to 2 million subscribers by 2004.
Méditel's extensive network build-out has already started to induce new competition in Morocco, and will facilitate much greater access for consumers at all income levels and establish wireless communications as the dominant form of connection. That expansion and flexibility will contribute to long-term economic growth, predicted Mohsen Khalil, the World Bank Group's Director of Global Information and Communication Technology.
The IFC investment, representing about 28 percent of total project costs, includes a senior loan of up to EUR 75 million equivalent and a subordinated loan of up to EUR 25 million equivalent, both for IFC's account, and a syndicated B loan for the account of participant banks of up to EUR 350 million equivalent. ABN Amro Bank and SG Investment Banking are acting as Lead Arrangers of the international bank loans, and BMCE Bank of Morocco is arranger of the local facility. The Swedish export credit agency EKN and the Spanish agency CESCE both provided export credit facilities. Deutsche Bank and BMCE Capital served as financial advisors to the company. The project finance debt facilities total EUR 1 billion.
The Government of Finland provided a grant to help the Moroccan government improve the license tender process in 1999. Finland paid for a technical specialist to review the government's tender documents and to propose license terms at an early stage of the tender.
Méditel is owned by a consortium of international telecom operators – Telefonica S.A. of Spain and Portugal Telecom S.A. – and Moroccan institutional and financial investors led by the BMCE Group.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC makes loans and equity investments, mobilizes capital in the international financial markets and provides technical assistance and advice to governments and businesses in the developing world.
