Douala, Cameroon, February 11, 2002—The
International Finance Corporation and PROPARCO have finalized an innovative
project financing for Société Camerounaise de Mobiles (SCM), to develop
and operate a nationwide GSM cellular telephone network in Cameroon.
IFC and PROPARCO are jointly providing a credit enhancement facility—comprising
partial guarantees and a stand-by facility—for a FCFA 29 billion (about
US$41 million equivalent) loan arranged by Société Générale (SG). The
credit enhancement was supplemented by subordinated loans from PROPARCO
and IFC for a total of Euro 5 million.
This is one of the first credit enhancements of a local currency loan for
a major infrastructure project in Africa. Structured to maximize
the use of local currency financing, it encourages local and regional banks
to participate in long-term project financing for an infrastructure project,
increases the amount of local currency loans, and extends their maturity.
The credit enhancement facility was successfully syndicated by SG to a
group of eight commercial banks: Société Générale de Banques au Cameroun,
Banque Internationale du Cameroun pour l’Epargne et le Crédit, Crédit
Lyonnais Cameroun, Standard Chartered Bank Cameroun, Commercial Bank of
Cameroon, Afriland First Bank, Société Générale de Banques en Guinée Equatorial,
and Société Générale Tchadienne de Banques.
SCM, one of two private cellular companies operating in Cameroon, has a
15-year license granted in 1999 by the government of Cameroon. Since
operations began in January 2000, SCM has out-performed its original estimates
and is leading the market with 226,000 subscribers. SCM’s presence
has introduced competition in the telecom market resulting in strong growth
and substantial price reductions. Along with the introduction of
new services, this has helped to significantly improve access to telecom
services. With SCM’s arrival, overall telephone penetration (mobile
and fixed) grew from approximately 100,000 at year-end 1999 to an estimated
nearly 450,000 today. SCM is majority-owned by Orange S.A., the mobile
subsidiary of France Telecom.
PROPARCO, a subsidiary of the French development agency, Agence Française
de Dévéloppement, is dedicated to private sector financing.
Marc Gilbert, PROPARCO’s Representative in Douala, said, “The development
of such a modern, efficient, and affordable infrastructure is an essential
tool in fighting poverty and in supporting a process of sustainable development.
SCM’s telecom infrastructure contributes to improving links with
remote areas, increasing competitiveness through better and cheaper access
to information, and attracting foreign investors.”
Mohsen Khalil, Director of the joint World Bank-IFC department for Global
Information and Communication Technologies, said, “SCM is an example of
the pivotal role that the private sector can play in developing the information
infrastructure of Africa, an essential pre-requisite for integrating with
the increasingly information-based global economy. By using a new
instrument to promote local currency financing for the first time in Africa,
IFC is helping to upgrade the country’s infrastructure and make urgently
needed communications infrastructure more affordable to a large part of
IFC’s mission 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, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956, IFC has committed more than $31 billion of its own funds and arranged
$20 billion in syndications for 2,636 companies in 140 developing countries.
IFC's committed portfolio at the end of FY01 was $14.3 billion.