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IFC TO HELP FINANCE UGANDA'S FIRST PRIVATE TELECOMMUNICATIONS NETWORK


Asimina Caminis
(202) 473-9737


WASHINGTON, D.C., Oct. 6 -- The International Finance Corporation (IFC) will provide up to US$5.6 million to help finance the development and operation of the first phase of a national cellular telecommunications network in Uganda by Clovergem Celtel Limited (CCL), a Ugandan company. CCL was awarded the concession for Uganda's first private telecommunications network after international competitive bidding. The cost of setting up and operating the network is estimated at US$16 million. Uganda's telecommunications sector, which is still relatively undeveloped, was recently opened to private investment. At present Uganda has only 23,000 telephone lines for a population of 17 million; fewer than 50 percent of all calls go through. For every 100 persons, there are only 0.12 telephones in Uganda, compared with an average of 0.4 in sub-Saharan Africa as a whole, 4 in Asia, and 51 in North America. The advantages of a cellular system include the relative speed with which it can be set up and the mobility it provides
. IFC will provide a senior loan of US$4.16 million, a subordinated income-participating loan of up to US$0.8 million, and an equity investment of up to US$0.64 million. CCL's other shareholders include Clovergem AG of Switzerland, the project sponsor; two British companies, Mobile Systems International and Vodafone; and the United Kingdom's Commonwealth Development Corporation, which is also providing income-participating and senior loans. CCL will use Global System for Mobile Telecommunications (GSM) digital technology, which is the standard in Europe and is being used in several other African countries, including Namibia and South Africa. The technical appraisal of the project was financed through a Technical Assistance Trust Fund set up by IFC and the Swedish Government. The network, which has the capacity to serve more than 15,000 subscribers, will cover Entebbe, Kampala, and Tororo, as well as the corridors between these cities. IFC, a member of the World Bank Group, is the largest multilateral source o

f financing for private sector projects in developing countries.