50364 - TA Bond 2024

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Summary of Investment Information

Project Number

50364

Company Name

TELECOM ARMENIA OJSC

Date SPI Disclosed

Dec 17, 2024

Country

Armenia

Region

Europe

Projected Board Date

Dec 4, 2024

Environmental Category

B - Limited

Status

Active

Last Updated Date

Jan 4, 2025

Department

Regional Industry INF LAC & EUR

Industry

Telecommunications and Technology

Previous Events

Approved : Dec 4, 2024
Signed : Dec 9, 2024
Invested : Dec 16, 2024

Sector

Mobile Telephony

Project Description

The proposed investment will support Telecom Armenia OJSC (“Telecom Armenia” or “Company”, https://www.telecomarmenia.am/en/about-us/), an existing IFC client, in issuance of a senior unsecured sustainability-linked bond (the “SLB”) in the amount of up to US$75 million, to be listed on the Armenia Stock Exchange.

Telecom Armenia is the second largest mobile network operator (“MNO”) and internet service provider in Armenia. The Company operates under the brand name “Team” and is publicly listed on Armenia Stock Exchange since October 2023.

The SLB proceeds are expected to be used to: (i) refinance the Company’s current loans; (ii) finance the Company’s investments in advanced technologies (such as 4G+ and Fiber to the Home) to meet the growing demand for faster data services, expand its coverage throughout Armenia, densify its network and improve customer service; and (iii) strengthen the Company’s competitive position in the Armenian telecom market.

Associated Advisory Engagement

IFC is providing client-level advisory services to Telecom Armenia to support the development of the Company’s cybersecurity action plan. The purpose of this assignment is to review the Company’s cybersecurity risk management framework, policies and processes to identify gaps and recommend remedial actions.

By supporting Telecom Armenia in addressing its cybersecurity gaps, IFC is playing an important role in strengthening the Company’s operational resilience, which is fundamental to ensuring the Company’s business continuity and implementation of its investment plan.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	15.0
Equity

Development Impact

The project is expected to increase the capacity of the Company to improve access to quality mobile broadband for individuals and businesses in Armenia through the deployment of fiber and 4G+ infrastructure. A portion of the SLB proceeds will go towards refinancing of existing debt enabling the Company to free up cash flow that will be used to fund its annual CAPEX program. The project will support the integration of the capital market in Armenia via the issuance of the first SLB. The success of this transaction will demonstrate the viability of the SLB asset class that will support private companies to raise funds from various investors as well as improve their environmental impact through the achievement of sustainable targets linked to this financing method.

IFC’s additionality in this project is both financial and non-financial. Financial additionality derives from the innovative financing structure, with IFC participating as an anchor investor in the public issuance of the first SLB in Armenia. Non-financial additionality stems from the knowledge, innovation, and capacity building IFC is providing by supporting the Company in developing the SLB framework, assisting with the cybersecurity risk assessment and reducing gender gaps in its workforce.

E&S Category Rationale / Risks and Mitigation

This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability. Based on information reviewed by IFC, the proposed project is expected to have limited adverse E&S risks and impacts that are few in number and site-specific, and readily addressed through existing mitigation measures and good international industry practices (GIIP) as described in the following sections.

Contacts

For Inquiries About the Project, Contact

Telecom Armenia OJSC
Arpine Chalkyan
Head of Strategic Programs
+374 95 988 723
arpine.chalkyan@teamgroup.am
Azatutyan Ave. 24/1 Building, 0014, Yerevan, RA
https://www.telecomarmenia.am/en/about-us/

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2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

Local Access of Project Documentation

Telecom Armenia OJSC, 24/1, Azatutyan Ave., 0014, Yerevan, Republic of Armenia

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. Its purpose is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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