The IFC has agreed to provide a US$400m seven-year debt facility to mobile operator Zain Iraq, Zain Group announced today.
The facility, compiled over the last four months, consists of an IFC (A) loan of US$155m; a US$50m (B) loan committed by Ahli…
The IFC has agreed to provide a US$400m seven-year debt facility to mobile operator Zain Iraq, Zain Group announced today.
The facility, compiled over the last four months, consists of an IFC (A) loan of US$155m; a US$50m (B) loan committed by Ahli United Bank; and four syndicated parallel loans totalling US$195m by Proparco, Infrastructure Crisis Facility, DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, and FMO (Netherlands Development Finance Co).
The facility is guaranteed by Zain.
The purpose of the debt is to enable Zain Iraq to expand service coverage, improve telecoms quality throughout the country, encourage entrepreneurship and innovation, and create new jobs.
According to Zain Group CEO Nabeel Bin Salamah, “This debt facility is an enormous vote of confidence by the IFC and the international financial community in Zain Iraq’s performance to date and its future expansion plans in a diverse and promising economy. The financing comes at a vital stage of the mobile operations business growth cycle as it expands to serve a relatively low-penetrated, yet high-potential mobile market.”
Dimitris Tsitsiragos, IFC Director for the Middle East, North Africa and Southern Europe, said: “For conflict-affected countries such as Iraq, where the movement of people and goods is complicated, access to reliable, high-quality voice and data services is key for economic activity and for personal and family safety. This facility demonstrates IFC’s commitment to supporting economic integration by facilitating cross-border investments within the region.”
IFC brought together the commercial bank syndication market and the development finance community to provide access to different sources of financing for Zain Iraq and to help promote the development of a syndicated loan market in Iraq.
Zain says that its Iraqi business boasts 12 million customers, or 50% of the mobile market. It adds that it plans to add another 4 million subscribers over the next
five years, by targeting the country’s poorest governorates, including Al-Anbar, Diala and Salahuddin.
The IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries.