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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 | 10872 |
| Project name | Grameen Phone II |
| Country | Bangladesh |
| Sector | Information |
| Department | Global Inform. & Comm. Tech. |
| Company name | GrameenPhone Limited |
| Environmental category | B |
| Date SPI disclosed | November 7, 2003 |
| Projected board date | December 12, 2003 |
| Status | Active |
| Previous Events | Invested: August 26, 2004
Signed: June 17, 2004
Approved: December 19, 2003 |
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| Description of company and purpose of project |
GrameenPhone Limited (GrameenPhone or the company) is an existing company, and is the leading cellular service provider in Bangladesh operating a nationwide, GSM, digital network with over one million subscribers, equivalent to a 70% market share. In addition to providing prepaid and postpaid cellular phone services, the company also assists in a -Village Phone- service by being the sole provider of telecommunications services to the Village Phone operators. The Village Phone service provides rural connectivity to approximately 30 million people. IFC previously funded the company’s initial network roll-out in 1999 by extending a financing package consisting of a senior loan of $16.7 million and a preferred share investment of $1.57 million for 3% of the company on a fully diluted basis.
The purpose of the project is to fund the expansion plans of the company. Bangladesh continues to have one of the lowest telephone density rates in the world: the estimated telephone penetration rate (fixed line and cellular) is currently 1.5%. This project will help increase access to modern and reliable telecommunications services by funding the company’s expansion plans through to the end of 2004. |
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| Project sponsor and major shareholders of project company |
The project sponsors are:
- Telenor ASA: Telenor is the state-owned telecommunications company in Norway. It operates in a number of countries in Europe and Southeast Asia. The company is Norway's leading distributor of voice, information, knowledge and entertainment through a broad range of modern communications services. Telenor became a listed company in December 2000. In 2002, Telenor achieved a total revenue of $7 billion, EBITDA of $1.7 billion, and a net loss of $0.5 billion.
- Grameen Telecom: Grameen Telecom is a non-profit organization and a subsidiary of Grameen Bank, an internationally recognized microfinance bank. Grameen Telecom, with the help of Grameen Bank, administers the Village Phone services to villagers and trains the operators, as well as handles all service-related issues.
The company’s shareholding structure is as follows: Telenor (51%), Grameen Telecom, (35%), Marubeni (9.5%), and Gonofone (4.5%). |
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| Total project cost and proposed IFC investment |
| The total project cost is estimated at $150 million, of which $125 million is for capital expenditures and the remaining $25 million consists of the refinancing of loans extended by IFC, ADB and CDC, which were extended in 1999 to finance the company’s initial network build-out. The proposed IFC investment consists of a senior loan for IFC’s own account of up to $45 million. |
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| Location of project and description of site |
| The project will result in GrameenPhone extending its network coverage to all 64 districts of Bangladesh; it currently has coverage for 50 of those districts. The project therefore covers several sites, both urban and rural in nature. |
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| Project Development Impact and IFC's Role |
This project will:
- Expand access to telecommunications services, as well as improve the quality of service being offered. In addition, the continued role of providing connectivity in rural areas will further support economic development in rural Bangladesh.
- Improve the basic infrastructure required to promote further private sector development.
IFC’s role in the Project encompasses the following:
- Improving access to telecommunications: by continuing to support the development of the telecommunications sector in Bangladesh, IFC can assist in further promoting the growth of the telecommunications sector both in terms of improving telephone density, as well as improving the efficiency of a dominant player in the cellular industry.
- Mobilizing financing (parallel lenders). |
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| Environmental and social issues - Category B |
This is an existing investment of IFCs and the new project will be a category B. Key environmental, health, and safety issues which were examined as part of the environmental review of this project originally and whose status will be appraised include: completion and implementation of a corporate wide environmental and social management system, selection and acquisition of sites for switching centers, liquid and solid waste management; use and storage of hazardous materials; ambient noise; fire protection and emergency response; and workplace health and safety (including air quality, noise, electrical hazards). This project will meet all applicable World Bank social and environmental policies and guidelines.
To view the environmental documents for this project, click here |
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| Location of environmental documents in locally affected community |
The environmental documents and the ERS for this project are made available in the following locations in Bangladesh:
- GrameenPhone Limited
Dhaka Sales Center
Nasim Villa, NW(H) – 2A, Gulshan Avenue, Gulshan 2, Dhaka 1212, Bangladesh
- GrameenPhone Limited
Chittagong Sales Center
59 Agrabad Commercial Area, Chittagong, Bangladesh |
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| To contact the project company, please write to: |
Mr. N.K.A. Mobin, Finance Director
GrameenPhone Limited
Celebration Point Road #113/A Plot# 3 & 5,
Gulshan, Dhaka
Bangladesh |
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