Lagos, Nigeria, November 21, 2003—In
its most significant investment in Nigeria since the return of democracy,
the International Finance Corporation -- the private sector arm of the
World Bank Group— recently finalized agreements for a $100 million
investment in MTN Nigeria, the country’s leading cellular operator.
Mr. Peter Woicke, IFC Executive Vice President, and Ms. Haydee Celaya,
IFC’s Director for Sub-Saharan Africa, handed the $100 million check to
MTN Nigeria at a ceremony in Abuja attended by Mr. Pascal Dozie, Chairman,
MTN Nigeria, and other members of its board and top management. Also present
were a number of high-level Nigerian dignitaries.
The MTN investment is one of IFC’s largest in the telecommunications sector
and its second largest investment to date in Sub-Saharan Africa. It
is unique in that $50 million of its exposure has been structured
to enhance a Nigerian bank syndicate, thereby allowing the company to have
access to local currency and to develop a medium-term local bank lending
IFC’s investment is part of a $395 million financing package comprising
a local currency syndicate that includes Nigerian banks and senior loans
from IFC, Standard Chartered Merchant Bank, DEG and FMO. The total financing
package has been arranged by Citigroup (London) and Standard Bank (London)
to support MTN Nigeria’s $1.3 billion capital expenditure program. The
financing will be used to expand and improve MTN’s network in Nigeria,
allowing it to reach smaller communities and boost service quality.
MTN Nigeria is part of MTN Group, one of Africa’s leading cellular network
operators. In February 2001, MTN Nigeria was awarded a 15-year GSM license
through an open auction process and launched its service in August 2001.
By February 2003,it had connected its millionth active subscriber.
The company now provides coverage to 56 cities and over 1,000 villages
and communities spanning all of Nigeria’s six geopolitical regions. Owing
to the huge demand for telecommunication services, the company achieved
a total of more than one million subscribers within less than two years.
Mr. Woicke said, “MTN Nigeria is providing much-needed telecom services
to the Nigerian people and we are delighted to support this project. Liberalization
of the mobile telephone sector is revolutionizing telecommunications, improving
service quality, and expanding access to previously under-served parts
of the population. This is IFC’s most significant investment in Nigeria
and one of its largest projects in Africa. The project clearly demonstrates
that successful reforms will attract institutions such as IFC, as well
as the private sector.”
According to Stephanie von Friedeburg, the World Bank Group’s Manager
of Investments in the Global Information and Ccommunications Technologies
Department, MTN’s success and the rapid growth of the cellular market
in Nigeria are the result of sector liberalization put in place by the
government of Nigeria with support from the World Bank Group. “In a matter
of a few years since the reforms began, there are now almost four times
the number of installed telephone lines. This is clearly the best illustration
that that a fair and transparent licensing process and the introduction
of competition can benefit all stakeholders in the economy. Furthermore,
IFC’s investment complements the ongoing advisory work of the World Bank
by catalyzing significant private capital at tenors normally not available
in Nigeria,” she said.
Haydee Celaya noted that this investment also fitted well with IFC’s
strategy for Nigeria, as it has facilitated private participation in key
infrastructure areas and has supported the Government’s reform of the
telecommunications sector. “It has also encouraged the participation
of a large number of local banks in a medium-term syndication, thereby
helping the development of local financial markets”, she said.
MTN Nigeria is controlled by one of Africa’s largest cellular companies,
MTN Group Limited of South Africa (www.mtngroup.com),.
The MTN Group Limited of South Africa is an African cellular network operator
listed on the Johannesburg Securities Exchange. MTN launched services in
1994 and now has more than 5 million subscribers in South Africa, Nigeria,
Cameroon, Uganda, Rwanda and Swaziland. It is one of South Africa’s largest
and most successful black-controlled companies.
“We appreciate very much this first opportunity of cooperation between
IFC and MTN. IFC’s ability to provide long-term maturities required for
a telecom project of this size, and its support to local currency financing,
will help MTN meet the demand for cellular services in NigeriaThe confidence
which our operation continues to generate among Nigerian and international
financial institutions provides evidence of our commitment not only to
our business objectives but also to the larger developmental aspirations
of Nigeria. This is at once gratifying and humbling and encourages us not
to relent in our efforts, despite the occasional challenge,” said Mr.
Pascal DoziePhuthuma NhlekoAdrianGroup.
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in developing countries,
helping to reduce poverty and improve people's lives. IFC finances private
sector investments in the developing world, mobilizes capital in the international
financial markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY03, IFC has committed more than $37
billion of its own funds and arranged $22 billion in syndications for 2,990
companies in 140 developing countries. IFC's worldwide committed portfolio
as of FY03 was $16.8 billion for its own account and $6.6 billion held
for participants in loan syndications.