25514 - Celtel Africa

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Summary of Proposed Investment

Project Number

25514

Company Name

CELTEL MALAWAI LIMITED

Date SPI Disclosed

Feb 14, 2007

Country

Africa Region

Industry

Telecommunications and Technology

Projected Board Date

Mar 22, 2007

Status

Completed

Sector

Mobile Telephony

Department

TMT, Venture Capital & Funds

Environmental Category

C - No Impact

Previous Events

Approved : Sep 16, 1999
Signed : Nov 19, 1999
Invested : Nov 24, 1999

Project Description

Celtel International B.V. (Celtel or the company) is a holding company that focuses on pan-African cellular operations. Celtel is a long-standing IFC client and was awarded the first IFC Client Leadership Award in 2004 for its commitment to best practice in corporate governance, environmental and social sustainability. The company has over 16 million subscribers covering fourteen countries in Sub-Saharan Africa (Burkina Faso, Chad, Congo Brazzaville, Congo DR, Gabon, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda and Zambia).

The project consists primarily of expanding and upgrading well established and fast growing mobile networks in five of Celtel operating subsidiaries. The subsidiaries are located in the Democratic Republic of Congo (DRC), Madagascar, Malawi, Sierra Leone and Uganda. These are post-conflict and frontier countries with low tele-penetration and where there is significant unmet demand and potential growth. The project is also structured to refinance some existing Celtel shareholder loans, the proceed of which will be used to fund capital expenditures in its other subsidiaries in Sub-Saharan Africa, and for acquisitions purposes.

Sponsor / Cost / Location

Development Impact

The telecommunications markets in DRC, Madagascar, Malawi, Sierra Leone and Uganda are defined by low penetration rates, obsolete and inadequate fixed-line networks, lack of standard regulations, underdevelopment, high tariffs and low digitization. The Project would help to improve and expand the telecommunications networks in these countries. It would help modernize telecommunications technology in some regions, while in other regions it would help promote competition by making cellular communications more affordable and available to larger segments of the population. Greater availability of services and improvement of telecom service quality would greatly increase the overall business efficiency in these countries, thereby encouraging investment in other sectors, promoting economic growth, and providing a greater array and quality of information sources to emerging commercial and social activities.

IFC’s proposed loans to the borrowers will:

Support much needed infrastructure development
Invest in people and reduce poverty as a result of expanding the networks into previously underserved areas and creating employment
Support investments in post-conflict countries such as DRC and Sierra Leone
Reaffirm its support of an existing client by mobilizing funding for the first time in some of the countries

These investments will also assist the competitiveness of the respective telecom markets, increasing telecom usage nationwide, improving the efficiency of the business sector and increasing the connectivity between these markets and the global community.

This project has been assessed to be environmental/social Category C, according to IFC''s environmental and social review procedure. Under IFC''s previous investments with Celtel, the company has been required to develop and implement an environmental/social management system (ESMS) and submit to IFC environmental/social Annual Monitoring Reports (AMRs), which it has done to IFC''s satisfaction. During appraisal, Celtel confirmed that its ESMS will extend to any new operations. For the duration of this new investment, Celtel is expected to implement its ESMS in all operations financed by this investment, and to continue to submit AMRs.

Contacts

For Inquiries About the Project, Contact

Mr. Fabrice Nze-Bekale,
Corporate Finance Manager
Celtel International B.V.
2132 LR Hoofddorp
The Netherlands
Telephone: 31 23 569 3964

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. 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 Policy on Disclosure of Information that went into effect April 30, 2006.

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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