Wednesday, July 22, 2009

IFC boosts Zain Ghana expansion with N13.3bn

Still basking in the euphoria of the recent two-day visit of the United States president, Mr. Barack Obama to Ghana, a member of the World Bank Group, the International Finance Corporation (IFC), has given a life-line worth $90 million (about N13.3 billion) to Zain Ghana, for expansion projects in the country.

This is coming as IFC also mobilized additional $70 million (about N10.3 billion) in syndications to help Zain Ghana expand its mobile telecommunications network and address the country’s growing demand for affordable communications services.

Zain Ghana is majorly-owned by Zain Group, a leading Middle Eastern telecommunications company and a long-time IFC partner.

IFC in a press statement from its Washington DC office signed by Ms. Alexandra Klopfer, said that the syndicated loan, in the form of an IFC B-loan and a parallel loan, has a seven-year tenor and was over-subscribed by 30 per cent.

The IFC B-loan was provided by Cordiant Capital, the Emerging Africa Infrastructure Fund Limited, FirstRand Bank Limited, and the Netherlands Development Finance Company, while IFC is acting as a lender of record for the B-loan participants and as an agency vis-à-vis the parallel lender, the OPEC Fund for International Development, simplifying communications between Zain Ghana and the lenders.

“Our subscriber base in Ghana already exceeded one million and this investment will enable us to scale up our operations and provide affordable and reliable communications services to a much larger part of the population,” said Zain Ghana Country Manager, Mr. Philip Sowah.

He also said that with this development, IFC has brought in a significant number of regional, long-term commercial investors – a great vote of confidence for this frontier market, particularly in the current economic crisis.

Noting that after liberalizing the telecommunications sector and promoting competition, Ghana has experienced significant growth in the availability of telecommunications services, at lower costs to consumers.

“At 45 per cent the mobile penetration rate is higher than in other countries in Sub-Saharan Africa with similar per capita incomes. Still, Ghana’s teledensity is concentrated in urban areas, leaving the penetration rates in rural and semi-urban areas well below 10 percent due chiefly to capital, infrastructure, and affordability constraints,” he declared.

The press statement quoted the IFC Senior Manager for Global Information and Communication Technologies, Ms. Stephanie von Friedeburg as saying the corporation was pleased to support Zain Ghana in offering access to affordable, quality service beyond large cities to remote and rural areas across Ghana.

“This fits well with IFC’s objective to support the government in making available affordable telecommunications services to underserved populations,” he said.

ITRealms Online recalls that IFC, is reputed for creating opportunities for people to escape poverty and improve lives, while fostering sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments.

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