COLOMBO, SRI LANKA, January 23, 2004—
The International Finance Corporation, the private sector arm of the World Bank Group, recently
finalized agreements for a $50 million loan package to MTN Networks (Pvt) Ltd, the country’s mobile telecommunications leader known by the brand name, DIALOG GSM.
Assaad Jabre, IFC’s Vice President of Operations, and Dimitris Tsitsiragos, IFC’s Director for South Asia, attended the signing ceremony held in Colombo along with Mr. Tan Sri Dato' Ir Md. Radzi bin Haji Mansor, Chairman of MTN Networks and Telekom Malaysia, and other members of the company’s board and top management. Also present were a number of high-level Sri Lankan dignitaries.
IFC’s funding, which is its second in the telecom sector in the country, consists of a loan of up to $30 million for IFC’s own account and a stand-by facility of up to $20 million. This is IFC’s largest single investment in Sri Lanka to date and one of the largest in the country’s telecommunications sector.
It will partly fund the $140 million nationwide expansion and upgrading of the leading GSM network in Sri Lanka, a country whose infrastructure has not kept pace with economic growth because of a protracted civil war. The network rollout will help promote economic development beyond the Colombo region and provide more affordable and available telecommunications services.
MTN Networks is a wholly owned subsidiary of Telekom Malaysia International Sdn, Telekom Malaysia Berhad’s international operating arm. Since being awarded its license in 1993, Dialog GSM has become Sri Lanka’s market leader, currently serving over 50 percent of the country’s mobile telephone subscribers. A key reason for the expansion is to reach potential subscribers in the underserved northern part of Sri Lanka where, because of civil conflict, telecommunications infrastructure is weak.
Mr. Jabre said, “We are pleased to support a company that is playing a leading role in expanding access to telecommunication services, especially in the north and east of the country where access has been most limited. IFC sees great potential for private financing to contribute to the rapid development of Sri Lanka’s infrastructure, while offering attractive returns to investors. IFC’s loan to MTN Networks is a concrete demonstration of this.”
Telekom Malaysia Berhad is Malaysia’s leading telecommunications company, providing voice and data services through its fixed-line, mobile, and Internet subsidiaries. It is listed on the Kuala Lumpur Stock Exchange with a market capitalization of approximately $6.4 billion equivalent and majority ownership held by the government of Malaysia. Telekom Malaysia has extensive experience in building and operating mobile networks in developing countries with operations in Bangladesh, Cambodia, Ghana, Guinea, Malawi, South Africa, Sri Lanka, and Thailand. Together, Telekom Malaysia’s international operations have more than 7 million subscribers and contribute approximately 8 percent of Telekom Malaysia’s net profit after tax.
Chairman Mansor said, “Dialog has come of age. Today, the company is not only capable of securing its own financing but in addition to being the leading cellular operator in Sri Lanka, is also the pioneering mobile telephony provider in the North and East of the country, having made a bold entry in to the previously war torn areas shortly after the cessation of hostilities. Telekom Malaysia is indeed proud of the achievements of its wholly-owned subsidiary.”
The mission of IFC (
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.