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| Warid Telecom |
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| 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 | 25230 |
| Company name | Warid Telecom International LLC (WTI) |
| Country | Pakistan |
| Sector | Information |
| Environmental category | B |
| Department | Global Inform. & Comm. Tech. |
| Status | Pending Approval |
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| Date SPI disclosed | April 20, 2007 |
| Projected board date | May 22, 2007 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The project consists of financing the construction, expansion and operation of a nationwide mobile cellular telecommunications network employing GSM technology in Pakistan. Warid Telecom (Pvt) Ltd (Warid or the company) was successful in winning a 15 year mobile license auctioned by the Pakistan Telecommunications Authority (PTA) in early 2004 with a bid of $291 million. The project total cost is estimated to be about $1.4 billion from June 2006 to June 2009. |
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| Project sponsor and major shareholders of project company |
| Warid is majority owned by a group of private investors based in Abu Dhabi (known as the Abu Dhabi Group), with diversified business interests in banking and financial services, hotels, construction, real estate and manufacturing. Through its wholly owned subsidiary, Warid Telecom International, the Abu Dhabi Group is expanding in the mobile telecom sector with operations in Pakistan, Bangladesh, Uganda, and Congo Brazzaville. |
| Total project cost and amount and nature of IFC's investment |
| The project cost is estimated to be $1.4 billion, and covers the license fee, capital expenditures and working capital from June 2006 to June 2009. IFC’s investment for its own account, consisting of an A loan, would be up to $100 million; in addition, IFC may syndicate up to $140 million in a B Loan from international commercial lenders. Equity contributions from the sponsor, an ECA guaranteed international loan facility and local finance would provide the balance of the required funding. |
| Location of project and description of site |
| Warid Telecom is headquartered in Lahore, Pakistan. In addition to its headquarters, the company operates a nationwide cellular network in accordance with industry best practice. |
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| Anticipated development impact of the project |
| Warid’s entry into the Pakistani cellular market (simultaneously with another, competing operator, Telenor) has reshaped the telecommunications market in a country with approximately 160 million inhabitants. Prior to Warid’s entry in May 2005, Pakistan ranked at the bottom of regional comparisons in terms of tele-density with approximately a 3% fixed and 3.3% mobile penetration rate. As of February 2007, mobile penetration has increased to 34% (equivalent to 53 million subscribers) while fixed line penetration has remained constant. Multiple independent studies demonstrate the multiplier developmental impact of increased mobile penetration in terms of GDP growth, employment creation, FDI and contribution to public finance. |
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| IFC's expected development contribution |
| Through its investment in the project, IFC will provide long term financing in a priority frontier market, where international lenders are keen to commit long term financing with multilateral support. The Pakistani Government’s liberalization and private sector promotion policies are resulting in unprecedented growth in telecom sector. In this regard, IFC would like to assist Warid in its expansion plan and in becoming a market leader in Pakistan. |
| Environmental and social issues - Category B |
| This is a Category B project according to IFC’s environment and social review procedures. The company will ensure that all operations comply with applicable IFC guidelines and with the environmental, health and safety laws of Pakistan. In addition, the company will provide IFC with an annual environmental and social monitoring report. |
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| For inquiries about the project, contact: |
Mr. Abdul Aziz, Chief Financial Officer
Warid Telecom (Pvt) Ltd.
9th Floor, EFU House
Jail Road, Lahore
Pakistan
Telephone: +92 42 5715750/54
E-mail: Abdul.aziz@waridtel.com |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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