24480 - Wataniya Telecom Maldives Pvt. Ltd.

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Summary of Proposed Investment

Project Number

24480

Company Name

OOREDOO MALDIVES PVT. LTD.

Date SPI Disclosed

Aug 26, 2005

Country

Maldives

Industry

Telecommunications and Technology

Projected Board Date

Sep 30, 2005

Status

Completed

Sector

Mobile Telephony

Department

WBG Digital and AI

Environmental Category

C - No Impact

Previous Events

Approved : Oct 26, 2005
Signed : Nov 4, 2005
Invested : Dec 27, 2005

Project Description

Wataniya Telecom, the second cellular operator in Kuwait, currently serving 3.2 million subscribers in the MENA region, was awarded the second nationwide GSM license in the Maldives through its local subsidiary Wataniya Maldives Private Limited (WTM or the company) in November 2004 for a license fee of $1 million. The license award was the result of an open, competitive auction with other bidders including Telekom Malaysia, Syriatel Mobile Telecom and the Bharat Consortium. The project consists of the financing of network roll-out and related start-up losses as well as a fiber optic submarine cable, for a total estimated project cost of $70 million equivalent. IFC has been asked to provide a senior loan of $17.5 million, to be complemented by a similar $7 million loan from the OPEC Fund and a revolving facility of $5 million from the Bank of Maldives.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity

Development Impact

The project will have significant development impact, in particular to the population of the Maldives. For a country with a population spread over a large number of small islands, access to affordable communication is essential to reduce the impact of geographical isolation and physical separation that exists between the numerous islands communities. Further, since the country has limited natural resources, information and communication technologies are instrumental in developing the skills for obtaining knowledge and information and improving productivity. More particularly, the project will contribute to:

- lower prices by introducing competition,
- nationwide geographic coverage by providing coverage to all inhabited islands which is presently not the case,
- access to international connectivity, with the introduction of the submarine cable, and - redistribution of assets, as WTM has undertaken to offer up to 40% of the company’s shares to the Maldivian public through an IPO in the second year of net profitability.

IFC’s role would be to provide long-term funding which is not available from local or international commercial banks for a greenfield project of this type, and the risks associated with it. Further, telecom operators from the Middle East have been emerging as strong, pro-active players in the last few years which seek to expand beyond their region to other developing countries. To that effect, the project would support South-South investments by assisting a sponsor from the Middle East to successfully expand to South Asia.

Contacts

For Inquiries About the Project, Contact

Mark Hanna, Chief Executive Officer
Wataniya Telecom Maldives Pvt. Ltd.
2nd Floor, Urban Development Building
Hulhumale – Republic of Maldives

+960 962 1111 (Tel)
+960 35 0519 (Fax)

This Summary of Project Information (SPI) is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

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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