Washington, D.C., March 27, 2003—
The International Finance Corporation (“IFC”), the private sector financing arm of the World Bank Group, will provide, together with Banco Popular Dominicano, up to $130 million for Orange Dominicana SA to develop its telecommunications network. Orange Dominicana is the pioneer GSM mobile telecom operator in the country.
This investment, which will support the construction of Orange Dominicana’s mobile telecommunications network, represents one of the largest infrastructure financings to date for the Dominican Republic.
The operation includes a $35 million A loan for IFC’s own account; a $15 million subordinated income participating C loan for IFC’s own account, and a $50 million syndicated B loan for the account of international commercial banks. ING Bank and Credit Agricole Indosuez are Joint Lead Arrangers and FMO is Lead Manager for the IFC B Loan. Banco Popular Dominicano will provide a DOP680 million (approximately $30 million) loan on similar terms to IFC’s A and B Loans. The total investment is expected to reach $270 million by year end 2003, with the rest of the financing coming from the shareholders in a combination of equity and loans.
The deal fits well with IFC’s strategy to foster the development of a sound market economy in the Dominican Republic, encourage private-sector participation in infrastructure, mobilize long-term debt financing and promote foreign direct investment.
Bernard Pasquier, IFC's Director for Latin America and Caribbean, said: “The Orange project is expected to broaden private sector participation in the Dominican economy which is very important for sustained economic growth.”
IFC’s current portfolio in the Dominican Republic is $288 million. IFC's investments are in diversified sectors such as telecoms, healthcare, maritime infrastructure, agribusiness and tourism. IFC’s commitments in the Dominican Republic reached $80 million in FY 2002, amongst the top five countries in LAC for that year. Recently, IFC assisted the Dominican agency of investment promotion (OPI) to enhance the country’s ability to attract foreign investment.
Mohsen Khalil, IFC’s Director of Global Information and Communication Technologies Department.,
said: “IFC is pleased to support the Orange project, which is expected to have a significant impact on increasing competition in the telecom sector in the Dominican Republic. It will also help improve telecommunications access and services throughout the country.”
The expansion of Orange Dominicana is having and will continue to have direct benefits for consumers and businesses by increasing wireless penetration in the country, introducing new services and fostering further competition in the telecom sector through the introduction of new GSM cellular technology to the market. After just two years of operations, Orange Dominicana has become a major player in the Dominican Republic, already reaching a clear number 2 position on the mobile market with a 28% market share.
Raoul Fontanez, CEO of Orange, noted: “With the support and contribution of IFC, the company will bring a new standard of customer benefits and quality to the market and make a positive contribution to the development of the Dominican Republic.”
Orange’s shareholders include Orange SA, a leading international mobile telecommunications company based in France, with an 86 percent participation, and Carn Vale International Limited, with 14 percent, a company owned by local Dominican businessmen.
IFC's mission (
) 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. Since its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.