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L. Joseph
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WASHINGTON, D.C., February 24, 2000 - The International Finance Corporation, which has been advising the Government of Uganda on the restructuring and privatization of the national telecommunications operator, Uganda Telecom Limited (UTL), has overseen the sale of a 51 percent stake in UTL by international tender to a consortium led by Detecon of Germany for US$33.52 million.
Mr. Michael Opagi, Director of the Ugandan Privatization Unit, said the sale yielded prices above the expectations of many market observers and represented a vote of confidence from international investors in Uganda. He said the transaction shows the government's firm commitment to a fair and transparent privatization program.
IFC, which provides advice to governments on privatizations alongside its traditional role of project financing in developing countries, has advised the Ugandan government on a series of transactions and sector reforms. This transaction is an important step in the liberalization and development of the telecommunications sector, and follows the creation of an independent regulatory agency and the successful sale in 1997 of a telecommunications license to a second national operator led by MTN of South Africa and Telia of Sweden.
The Detecon consortium includes Telecel International Ltd. and the Ikwezi Group, which each control 40 percent of the consortium.
The project also received substantial donor support amounting to $580,000 from the Governments of Norway, Sweden and the U.S. from technical assistance trust funds.
Mr. Andre Cracco, Director of IFC's Corporate Finance Services predicted that the privatization of UTL would bring increased competition and that consumers would benefit from better services and lower tariffs.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.