|
|  |
| 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. |
 | |
| Project number | 24470 |
| Project name | Grameen Phone III |
| Country | Bangladesh |
| Sector | Information |
| Department | Global Inform. & Comm. Tech. |
| Company name | GrameenPhone Limited |
| Environmental category | C |
| Date SPI disclosed | October 31, 2005 |
| Projected board date | December 8, 2005 |
| Status | Pending Disbursement |
| Previous Events | Signed: June 28, 2006
Approved: December 8, 2005 |
|
| Description of company and purpose of project |
GrameenPhone Limited (GrameenPhone or the company) is the leading wireless services provider in Bangladesh. The company launched service in Dhaka in March 1997 and currently has more than four million subscribers, equivalent to a market share of 61%. GrameenPhone operates a nationwide digital network using GSM technology. Subscribers can choose from both prepaid and postpaid service plans. The vast majority of its subscriber base (91%) is prepaid. The company also provides telecommunications services to the highly successful Village Phone program run by Grameen Telecom. At the end of August 2005, there were approximately 160,000 Village Phone Operators covering about 50,000 of Bangladesh’s 68,000 villages.
This will be the third investment by IFC in GrameenPhone. Previously, IFC helped fund the company’s initial network roll-out through a senior loan of $16.7 million and a preferred equity investment of $1.57 million. In 2004, IFC extended a $30 million senior loan to the company, the proceeds of which were partially used to refinance IFC’s previous loan. The purpose of the current project is to fund the expansion of the company during 2005 and 2006.
While there are presently five mobile network operators in Bangladesh (with another operator expected to enter in the near future), the country has one of the lowest telephone density rates in the world: less than 54 total and less than 46 mobile telephone lines per 1,000 inhabitants (as of August 2005). The project will help increase telephone density in Bangladesh by allowing GrameenPhone to increase the capacity of its existing network and to expand its coverage to a larger geographic area as well as to the lower income segments of the market. |
|
| Project sponsor and major shareholders of project company |
GrameenPhone’s shareholders are Telenor ASA (62%) and Grameen Telecom (38%).
Telenor ASA is the largest provider of telecommunications services in Norway and has ownership interests in 12 mobile operations in Europe and Asia. Telenor’s strategy is to maintain its leading position in Norway and to develop profitable international mobile operations in emerging markets. Telenor was listed on Oslo Stock Exchange and Nasdaq on 4 December 2000. At the end of 2004, the Group had 21,750 employees, 9,750 of whom were employed abroad. For 2004, Telenor achieved revenues of $10.0 billion, EBITDA of $3.4 billion, and a net profit of $881 million.
Grameen Telecom is a non-profit organization and an affiliate of Grameen Bank, the leading micro-credit organization in Bangladesh. Grameen Telecom administers the Village Phone program, handling all service-related matters of the program and providing training to the operators. |
|
| Total project cost and proposed IFC investment |
| IFC’s $70 million investment is part of the Company’s plan to raise up to $320 million in financing from various sources to fund its CAPEX for 2005 and 2006. |
|
| Location of project and description of site |
| Based in Dhaka, Bangladesh, GrameenPhone provides telecommunication services in 61 out of the 64 districts of Bangladesh. The project consists of the expansion of GrameenPhone’s network in both urban and rural areas. The company is looking to cover all districts by year-end 2006. |
|
| Project Development Impact and IFC's Role |
The project will further improve access to telecommunications services for the people of Bangladesh. The project will also enhance the quality and enable the further development of the telecommunication services being provided. Increasing access to ICT, especially in rural areas, will further support Bangladesh’s economic development. By supporting the initial creation and the further development of a “national champion”, IFC also hopes to improve the enabling environment such as expanding local capital and bank markets and supporting a sound regulatory framework.
IFC’s role in the project is to co-finance GrameenPhone’s ongoing expansion in an environmental and socially sound manner. Existing co-lenders Norfund and ADB are also considering providing additional funds to the company. |
|
| Environmental and social issues - Category C |
This is a category C project according to IFC's Environmental and Social Review Procedure. Under IFC's previous investments in GrameenPhone, the company was required to develop and implement an environmental and social management system (ESMS) and submit to IFC environmental/social Annual Monitoring Reports (AMRs), and these requirements have been met to IFC's satisfaction. GrameenPhone has recently updated its ESMS and it appears adequate to manage the environmental and social impacts of the company's activities under IFC's new investment. The updated ESMS is documented in a Health, Safety and Environment Manual which the company has agreed to disclose publicly. The HSE Manual is attached to this document. It is termed a draft as it is subject to continuous improvement. IFC will require the company to continue to implement its ESMS and provide AMRs for the duration of IFC's new investment.
|
|
| To contact the project company, please write to: |
Mr. N.K.A. Mobin, Finance Director
GrameenPhone Limited
Celebration Point
Plot# 3 & 5
Road #113/A
Gulshan - 2,
Dhaka - 1212
Bangladesh
mobin@grameenphone.com
HSE Manual:
 |
|
|
|