Washington, D.C., March 27, 2003—The
International Finance Corporation (“IFC”), the private sector financing
arm of the World Bank Group, will provide, together with Banco Popular
Dominicano, up to $130 million for Orange Dominicana SA to develop its
telecommunications network. Orange Dominicana is the pioneer GSM
mobile telecom operator in the country.
This investment, which will support the construction of Orange Dominicana’s
mobile telecommunications network, represents one of the largest infrastructure
financings to date for the Dominican Republic.
The operation includes a $35 million A loan for IFC’s own account; a $15
million subordinated income participating C loan for IFC’s own account,
and a $50 million syndicated B loan for the account of international commercial
banks. ING Bank and Credit Agricole Indosuez are Joint Lead Arrangers
and FMO is Lead Manager for the IFC B Loan. Banco Popular Dominicano
will provide a DOP680 million (approximately $30 million) loan on similar
terms to IFC’s A and B Loans. The total investment is expected to
reach $270 million by year end 2003, with the rest of the financing coming
from the shareholders in a combination of equity and loans.
The deal fits well with IFC’s strategy to foster the development of a
sound market economy in the Dominican Republic, encourage private-sector
participation in infrastructure, mobilize long-term debt financing and
promote foreign direct investment.
Bernard Pasquier, IFC's Director for Latin America and Caribbean, said:
“The Orange project is expected to broaden private sector participation
in the Dominican economy which is very important for sustained economic
IFC’s current portfolio in the Dominican Republic is $288 million. IFC's
investments are in diversified sectors such as telecoms, healthcare, maritime
infrastructure, agribusiness and tourism. IFC’s commitments in the
Dominican Republic reached $80 million in FY 2002, amongst the top five
countries in LAC for that year. Recently, IFC assisted the Dominican
agency of investment promotion (OPI) to enhance the country’s ability
to attract foreign investment.
Mohsen Khalil, IFC’s Director of Global Information and Communication
Technologies Department., said: “IFC is pleased to support the
Orange project, which is expected to have a significant impact on increasing
competition in the telecom sector in the Dominican Republic. It will also
help improve telecommunications access and services throughout the country.”
The expansion of Orange Dominicana is having and will continue to have
direct benefits for consumers and businesses by increasing wireless penetration
in the country, introducing new services and fostering further competition
in the telecom sector through the introduction of new GSM cellular technology
to the market. After just two years of operations, Orange Dominicana has
become a major player in the Dominican Republic, already reaching a clear
number 2 position on the mobile market with a 28% market share.
Raoul Fontanez, CEO of Orange, noted: “With the support and contribution
of IFC, the company will bring a new standard of customer benefits and
quality to the market and make a positive contribution to the development
of the Dominican Republic.”
Orange’s shareholders include Orange SA, a leading international mobile
telecommunications company based in France, with an 86 percent participation,
and Carn Vale International Limited, with 14 percent, a company owned by
local Dominican businessmen.
IFC's mission (http://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. Since its founding in 1956 through FY02, IFC has
committed more than $34 billion of its own funds and arranged $21 billion
in syndications for 2,825 companies in 140 developing countries. IFC's
worldwide committed portfolio as of FY02 was $15.1 billion for its own
account and $6.5 billion held for participants in loan syndications.