Manila, July 13, 2006 AEST (ABN Newswire) - An Asian Development Bank (ASX: ATB) loan of up to US$40 million and guarantees of up to $15 million from ADB to Afghanistan's leading cellular network (Roshan) will help accelerate the expansion of mobile telecommunications services in the country.
The transaction builds on the success of the first-phase expansion of Roshan (a telecommunications company owned by the Aga Khan Fund for Economic Development, Monaco Telecom International and MCT Corporation) in Afghanistan, which was partly financed by an ADB private sector loan of $35 million approved by the ADB Board of Directors in November 2004.
Roshan has significantly exceeded subscriber and traffic growth targets, and the company has had to accelerate its capital expenditure program to meet strong demand.
"Telecommunications have become a vital part of the redevelopment process in the Afghan economy," says Michael Barrow, a Principal Structured Finance Specialist in ADB's Private Sector Operations Department. "We have already witnessed the revolutionary impact mobile phones have had on business, and the large external Afghan refugee community adds a further dimension to the importance of telecommunications for the country's development. The willingness of the private sector to build on investments in Afghanistan signals increasing confidence in the business climate".
Afghanistan continues to suffer from a critical lack of communications infrastructure and cellular phones are seen as the only viable method of providing country-wide communications services. The project will provide near country-wide coverage on an accelerated basis, additional network redundancy, and a network upgrade.
ADB's loan is being made without a government guarantee and comes from ADB's ordinary capital resources. The loan carries a 6-year term, including a grace period of 2 years, with interest to be determined in accordance with ADB's LIBOR-based loan facility.
The amount may include a commercial bank loan under the Complementary Financing Scheme (B-loan) in two tranches - both for up to $15 million - and a Political Risk Guarantee for the second tranche.
"Without the proposed financing, it is quite possible that Roshan would have to significantly scale back or delay its expansion program," says Mr. Barrow. "This would lead to capacity and quality concerns, to the detriment of all stakeholders and beneficiaries."
The balance of funding will be met through loans from various lenders, including Standard Bank Plc, the French Societe de Promotion et de Participation Pour La Cooperation Economique (Proparco), and the German Investment and Development Company.
Contact
Graham Dwyer
Email: gdwyer@adb.org
Tel:+632 632 5253; +632 898 3413; +63 915 741 4363
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