28005 - Comunicaciones Celulares S.A.

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Summary of Proposed Investment

Project Number

28005

Company Name

Comunicaciones Celulares S.A.

Date SPI Disclosed

May 26, 2009

Country

Guatemala

Industry

Telecommunications and Technology

Projected Board Date

Jun 26, 2009

Status

Completed

Sector

Mobile Telephony

Department

WBG Digital and AI

Environmental Category

B - Limited

Previous Events

Approved : Dec 10, 2009
Signed : Dec 11, 2009
Invested : Dec 21, 2009

Project Description

The project consists of a corporate loan for the expansion and upgrade of Comcel S.A.’s 2G and 3G mobile network throughout Guatemala, including rural areas of the country. Comcel S.A. is the largest mobile telephony operator in Guatemala. It has 4.5 million subscribers and approximately 45% market share.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	35.0
Equity

Development Impact

In general, the project will contribute towards:

- improving the performance of telecommunications networks (for both voice and data) in congested areas of main cities, and expand coverage in underserved and rural areas, where telecommunications services are scarce;
- providing capital investment and improve the telecommunications infrastructure in Guatemala;
- supporting the development of low-cost models of extending connectivity to rural areas;
- fostering the development of small medium enterprises (“SMEs”) and micro-entrepreneurs; and
- enabling other sectors of the economy to become more efficient through the increased use of ICT.

Further to improving coverage, affordability and availability of mobile telephony services, the project will also:

- increase broadband coverage through Comcel’s its 3G network;
- improve service quality;
- boost direct and indirect employment; and
- further fuel remittances through the purchase of airtime by individuals outside the country.

Access to long term financing: The deterioration of international credit markets in recent months has increased the difficulty for even strong emerging market firms such as Comcel to obtain needed financing. Even in relatively stable markets such as Guatemala, firms of the size of Comcel experience difficulties in raising commercial financing for infrastructure projects. IFC’s participation in the proposed investment will send a positive signal to the market about the continued health of the company and the sector.

Resource mobilization: By either providing a B-loan or promoting / helping structure parallel financing, IFC would provide the structure for attracting resources from financial institutions wary of Guatemalan country risk and current market volatility.

Promote sustainable SMEs along the supply chain: In its strategy of “Availability, Accessibility and Affordability”, Comcel works closely with small and medium enterprises that serve as distribution partners and dealers for Comcel handsets and airtime. With Comcel’s further expansion into rural areas of Guatemala, IFC and the project would be contributing to helping such SMEs expand their coverage footprint too.

The key issues associated with the project are environmental, health, safety, and social management; construction of towers; labor and working conditions (including occupational health and safety); pollution prevention and abatement, and community security. This has been classified as a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects. As a condition of IFC’s investment, Comcel will commit to an action plan for ensuring that all relevant social and environmental risks and impacts are managed as appropriate. Specific information about how risks, impacts and opportunities will be addressed by Comcel is summarized in the Environmental and Social Review Summary for the project.

Contacts

For Inquiries About the Project, Contact

Mr. Mynor Rebuli (Treasurer)
Telephone Number + (502) 2428-1009
Fax Number + (502) 2428-1155
Address Km. 9.5 Carretera a El Salvador
(CA1) Edificio Plaza Tigo
Santa Catarina Pinula, Guatemala

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Local Access of Project Documentation

Mr. Mynor Rebuli (Treasurer)
Telephone + (502) 2428-1009
Fax + (502) 2428-1155
Km. 9.5 Carretera a El Salvador
(CA1) Edificio Plaza Tigo
Santa Catarina Pinula, Guatemala

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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