Digicel Pacific Finance Limited

Summary of Proposed Investment

This Summary of Proposed Investment 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.

Project number	26531
Company name	Digicel Pacific Finance Limited
Country	East Asia and Pacific Region
Sector	Information
Environmental category	C
Department	Global Inform. & Comm. Tech.
Status	Dropped

Date SPI disclosed	May 28, 2008
Projected board date	June 30, 2008

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

The project consists of the construction and expansion of four cellular networks throughout the South Pacific Island region, sponsored by Digicel Pacific Limited (DPL or, together with Denis O’Brien, the “sponsors"). DPL plans to establish operations in four countries through its holding company, Digicel Pacific Holdings Limited (DPHL), in the South Pacific and has approached IFC to fund these operations that are expected to be established in the next 12-18 months.

Anticipated development impact of the project

Given the general poor state of existing telecommunications infrastructure, the project will have a significant development impact to both individuals and businesses in the South Pacific region. Telephone density (both fixed and mobile) in a large part of this region is amongst the lowest worldwide. Further, fixed line service remains expensive and is accompanied by poor coverage and quality. Despite several attempts, the government has found difficulty in privatizing the incumbents, leaving the market primarily with inefficient operators.

The project will improve the access to reliable and affordable telecommunication services for consumers and businesses as well as support the telecom liberalization process of undertaken by many local governments throughout the region.

IFC's expected development contribution

By supporting the project, IFC will provide long term financing in priority frontier markets in which private financing from local or from international commercial banks without multilateral support is scarce. IFC’s investment in the project will also help emerging competitive telecommunications markets develop, improve the efficiency of the business sector and increase connectivity between the South Pacific region and the global community. Furthermore, through this project, IFC will support an existing client who has demonstrated a clear track record of positive developmental impact in all geographical areas it has entered.

Environmental and social issues - Category C

Under IFC's previous investments with Digicel, the company has been required to develop and implement an environmental/social management system (ESMS) and to submit to IFC environmental/social Annual Monitoring Reports (AMRs), which it has done to IFC's satisfaction. For each new operation considered for funding by IFC under the proposed Facility, IFC has performed environmental and social due diligence, and will establish applicable requirements. These will include implementation of Digicel's corporate ESMS tailored to the new operation as needed, with the corporate ESMS subject to ongoing further revision as circumstances may warrant; compliance with applicable IFC and host country social and environmental standards; and provision to IFC of AMRs. This is assessed as a Category C project according to IFC's environmental and social review procedure, based on IFC's long-term relationship with the sponsor, and because there are limited environmental and social impacts which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines and design criteria.

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