27089 - Digicel Honduras S.A. de CV (Honduras)

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Summary of Proposed Investment

Project Number

27089

Company Name

Digicel Honduras, S.A. de C.V.

Date SPI Disclosed

May 1, 2008

Country

Honduras

Industry

Telecommunications and Technology

Projected Board Date

Jun 3, 2008

Status

Completed

Sector

Mobile Telephony

Department

WBG Digital and AI

Environmental Category

C - No Impact

Previous Events

Approved : Jul 31, 2008
Signed : Aug 20, 2008
Invested : Oct 8, 2008

Project Description

The project consists of the construction and operation of a greenfield mobile cellular telephone network in Honduras. The project will be implemented by Digicel Honduras S.A. de CV (Digicel Honduras), a company wholly owned by Digicel Central America Holdings Limited (Digicel CAL). Digicel CAL was awarded the fourth nationwide GSM mobile license in Honduras in April 2007 through an open tender process for $80 million equivalent.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	70.0
Equity

Development Impact

The project will improve the availability of reliable and affordable communications for consumers and businesses. With the entry of Digicel, the company conservatively projects mobile penetration in Honduras to increase to 75% by 2011. This is similar to Digicel’s experience in Jamaica, Haiti, and the Eastern Caribbean where Digicel’s entry into these markets spurred increased access to telecommunications and contributed to rapid growth in penetration rates. In addition, the entry of an experienced player such as Digicel into the market will encourage the existing mobile operators to invest further in their networks, thereby increasing availability and stimulating improved service standards, the development of value added services and, lower tariffs for consumers. Finally, the Project will create quality employment opportunities in Honduras at both the company and distribution levels.

By supporting the project, IFC will provide long term financing in a priority IDA country in which private financing from local or from international commercial banks without multilateral support is scarce. IFC’s investment in the project will also help an emerging competitive telecommunications market develop, improve the efficiency of the business sector and increase connectivity between Honduras and the global community. Furthermore, through this project, IFC will support an existing client who has demonstrated a clear track record of positive developmental impact in all geographical areas it has entered.

Under IFC''s earliest investments in Digicel, the company developed to IFC''s satisfaction a corporate environmental and social management system (ESMS) to ensure compliance with IFC''s environmental and social safeguard policies. Digicel is currently revising to its corporate ESMS to ensure it meets IFC''s Performance Standards, which became effective after IFC''s earliest investments in Digicel. Digicel has agreed to implement its forthcoming revised corporate ESMS in Honduras, tailored to operations in Honduras as needed, and to report on the implementation of the ESMS in annual monitoring reports to be submitted to IFC . Based on IFC''s long-term relationship with the sponsor, and because there are limited environmental and social impacts which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines and design criteria, this is a Category C project according to IFC''s environmental and social review procedure.

Contacts

For Inquiries About the Project, Contact

Dermot Hayes
Island Capital
6th Floor
1 Grand Canal Quay
Dublin 2 , Ireland

Tel: +35314325953
Fax: +35314325959

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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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