The project sponsor is Telefonica S.A. (the “Sponsor”), an international public company incorporated in Spain and listed on major stock exchanges in Spain, London, New-York, Lima, and Buenos Aires. Telefonica is a diversified telecommunications group which provides a comprehensive range of services through one of the world’s largest and most advanced telecom networks.

Otecel is 100% owned by the Sponsor via a Netherlands-based holding company Ecuador Cellular Holdings BV.

The total project cost is estimated at US$150 million. The proposed IFC investment is a US$75 million A loan for IFC’s own account.

75.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	75.0
Equity

* These investment figures are indicative

The Company is headquartered and has mobile telephony operations in Ecuador. As a mobile network operator, the Company has existing operations in both urban and rural areas throughout Ecuador.

As the most widely adopted technology in history, mobile is uniquely positioned to drive economic, environmental and social change. The industry is moving beyond basic connectivity to the use of mobile broadband to deliver services in adjacent sectors, such as health, financial services, agriculture and education. Movistar''s network expansion will have the following development impact:
(1) Increase of access and affordability of mobile services: This Project will help reducing the huge access and coverage gaps between urban and rural areas. In fact, the 4G license payment includes a contribution to a telecom fund aimed at ensuring that 4G technology is accessible for all, including rural and marginalised urban communities as well as educational institutions. In addition, this Project is expected to reduce pricing to regional levels, allowing for an increase in usage.
(2) Improve the Quality of Service: Movistar will likely invest strongly to improve quality of service measures in order to comply with the new, more stringent quality of service standards implemented in Ecuador in 2014.
(3) Create employment opportunities: The investments and expanded operations of Movistar will create incremental direct employment in the country.
(4) Increase competition: The increased competition with Claro and CNT leads to further declines in telephone tariffs and to grow mobile penetration.
(5) Data Services: Roll out of 4G technologies will also increase access to broadband services.

-Liquidity constraints in Ecuador: Local and international banks, which are still concerned by the Country''s risk perception and political stability, do not have capacity to fund the Company''s. In addition, capital markets will only provide a partial solution, with financial terms of less than a year. In this sense, IFC would be providing counter-cyclical finance to an important player in the market by providing support to the Company''s immediate financial needs.
-Stamp of approval: IFC would provide the appropriate comfort for the Company''s future financing needs (capex). Other financial institutions will rely on IFC''s industry knowledge and strong track record in appraising and structuring telecommunication transactions in challenging political and operating environments to support their participation in future financing rounds.
-Building a long term partnership: By supporting a leading telecom group such as Telefonica in one of its smallest operations, IFC has the opportunity to start developing a strong partnership with the Sponsor. This opportunity could lead towards future IFC investments and/or mobilization of additional financing, which is an attractive proposition to Telefonica Group.
- Telefonica Financial Services has selected Ecuador and the Company''s platform to implement a mobile payments pilot in the country. They have expressed interest in learning how can IFC could support this new initiative.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Direct Employment (#) - Operations and Maintenance	Employment (#)		Not Available	Not Available	Not Available
Female Direct Employment (#) - Operations and Maintenance	Female Employment (#)		Not Available	Not Available	Not Available

The key environmental and social (E&S) issues associated with this project are in the impacts of tower construction; labor and working conditions (including employee and contractor occupational health and safety); and pollution prevention and abatement. Details are contained in the E&S Review Summary for this project. Environmental and social risks and impacts in this project are expected to be limited, so the project is classified as Category B, according to IFC''s E&S review procedure.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.