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| Summary of Project Information (SPI) |
| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
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| Project number | 24480 |
| Project name | Wataniya Telecom Maldives Pvt. Ltd. |
| Country | Maldives |
| Sector | Information |
| Department | Global Inform. & Comm. Tech. |
| Company name | Wataniya Telecom Maldives Pvt. Ltd. |
| Environmental category | C |
| Date SPI disclosed | August 26, 2005 |
| Projected board date | September 30, 2005 |
| Status | Active |
| Previous Events | Invested: December 27, 2005
Signed: November 4, 2005
Approved: October 26, 2005 |
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| Description of company and purpose of project |
| Wataniya Telecom, the second cellular operator in Kuwait, currently serving 3.2 million subscribers in the MENA region, was awarded the second nationwide GSM license in the Maldives through its local subsidiary Wataniya Maldives Private Limited (WTM or the company) in November 2004 for a license fee of $1 million. The license award was the result of an open, competitive auction with other bidders including Telekom Malaysia, Syriatel Mobile Telecom and the Bharat Consortium. The project consists of the financing of network roll-out and related start-up losses as well as a fiber optic submarine cable, for a total estimated project cost of $70 million equivalent. IFC has been asked to provide a senior loan of $17.5 million, to be complemented by a similar $7 million loan from the OPEC Fund and a revolving facility of $5 million from the Bank of Maldives. |
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| Project sponsor and major shareholders of project company |
Wataniya Telecom (or the Group) was established in 1999 as the second cellular operator in Kuwait and has since expanded into the MENA region. To focus on its international expansion strategy, it bundled its operations outside Kuwait by setting up Wataniya International FZ LLC (Wataniya International or the sponsor) in mid 2004. Wataniya International, based in Dubai, offers strategic support to the Group’s operations in Algeria, Iraq, Maldives, Saudi Arabia and Tunisia and is pursuing further growth opportunities. By acquiring the license in the Maldives, the Group has made its first acquisition outside of the MENA region. With its existing operations, the sponsor has substantial experience in building and successfully operating GSM networks as a second and third market entrant.
The sponsor is wholly owned by Wataniya Telecom, which has been listed on the Kuwait Stock Exchange since 1999 and had a market capitalization of $2.9 billion equivalent by end of March 2005. At present, 45% of the Group’s shares are publicly held, while KIPCO (Kuwait Projects Company Holding, the largest non-government company in Kuwait with over $10 billion equivalent under management or control) owns 31%, and the Kuwait Investment Authority the remaining 24%. |
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| Total project cost and proposed IFC investment |
| The total project cost is estimated at $70 million. The proposed IFC investment is a US $17.5 m senior loan. |
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| Location of project and description of site |
| Wataniya Maldives Private Limited’s headquarter is located on Hulhumale. By building a nationwide greenfield cellular network, the company is providing mobile phone services to all inhabited islands in the Maldives. |
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| Project Development Impact and IFC's Role |
The project will have significant development impact, in particular to the population of the Maldives. For a country with a population spread over a large number of small islands, access to affordable communication is essential to reduce the impact of geographical isolation and physical separation that exists between the numerous islands communities. Further, since the country has limited natural resources, information and communication technologies are instrumental in developing the skills for obtaining knowledge and information and improving productivity. More particularly, the project will contribute to:
- lower prices by introducing competition,
- nationwide geographic coverage by providing coverage to all inhabited islands which is presently not the case,
- access to international connectivity, with the introduction of the submarine cable, and - redistribution of assets, as WTM has undertaken to offer up to 40% of the company’s shares to the Maldivian public through an IPO in the second year of net profitability.
IFC’s role would be to provide long-term funding which is not available from local or international commercial banks for a greenfield project of this type, and the risks associated with it. Further, telecom operators from the Middle East have been emerging as strong, pro-active players in the last few years which seek to expand beyond their region to other developing countries. To that effect, the project would support South-South investments by assisting a sponsor from the Middle East to successfully expand to South Asia. |
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| Environmental and social issues - Category C |
This project is a category C project according to IFC’s environmental and social review procedures. There are minimal environmental or social impacts associated with this project. Therefore, no further environmental or social analysis is required.
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| To contact the project company, please write to: |
Mark Hanna, Chief Executive Officer
Wataniya Telecom Maldives Pvt. Ltd.
2nd Floor, Urban Development Building
Hulhumale – Republic of Maldives
+960 962 1111 (Tel)
+960 35 0519 (Fax)
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