Celtel International gets $320m for African expansion

The International Finance Corporation (IFC) will finance Africa's largest cellular operator, Celtel, to the tune of $320 million (R2.4 billion), to help it expand its operations in five sub-Saharan Africa countries.

Announced recently at the World Economic Forum in Cape Town, the financing deal is the IFC's largest.

The corporation is the private sector arm of the World Bank, within sub-Saharan Africa, says Edward Nassim, IFC VP for Africa, Europe and the Middle East.

Celtel Chairman, Mo Ibrahim, says the loan will be used to build Celtel networks in rural areas and regions not covered in the Democratic Republic of Congo, Madagascar, Malawi, Sierra Leone and Uganda.

Ibrahim says this is also part of Celtel's strategy to build "one Africa network, which allows all the network operators' subscribers to roam freely on all Celtel networks on the African continent."

He says subscribers living in the Congo Republic, the Democratic Republic of Congo, Tanzania, Kenya, Gabon and Uganda are able to do so since September last year. The combined population of these countries is about 160 million people and the total area covered by the network is larger than Europe.

Celtel, the largest competitor to South Africa's MTN and Vodacom on the African continent, was bought by Kuwait's MTC in 2005. It has since invested $10 billion in African mobile telecommunications services.

Half of the $320 million loan will come from the IFC and the rest from a consortium or private banks located in the country where the expansion will occur and other African countries, such as SA.

Nassim says this loan, and the $424 million credit line IFC opened two months ago on behalf of the East Africa Submarine Cable System, are part of the IFC's overall strategy to invest in Africa telecommunications infrastructure.

"These investments fit into our overall telecommunications strategy to get involved in African infrastructure to lower the cost for consumers," he said. [via]