Metro Net SAPI de CV

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	28126
Company name	Metro Net, S.A.P.I. de C.V.
Country	Mexico
Sector	Professional, Scientific and Technical Services
Environmental category	C
Department	Global Inform. & Comm. Tech.
Status	Pend PDS-IR

Date SPI disclosed	November 6, 2009
Projected board date	December 7, 2009

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

Metro Net S.A.P.I. de C.V. (“ MetroNet” or the “Company”) is a Mexican corporation operating since 1996. MetroNet is a facility-based provider of: (1) Data Connectivity to telecom carrier customers, and (2) Data Center services to corporate and government customers. The Company has offices and metropolitan fiber optic networks in Guadalajara, Monterrey and Mexico City. Monterrey and Mexico City facilities include two data centers operated since 2000. In March 2009, MetroNet acquired a commercial data center from Diveo Broadband Inc., located in the Interlomas suburb of Mexico City (“Interlomas Data Center”). The project will help MetroNet finance its growth and expansion strategy by upgrading data center facilities to meet higher operational standards, and thereby improving service levels to customers.

Anticipated development impact of the project

Development of the IT sector in Mexico. Companies like MetroNet contribute to local IT sector growth, competitiveness and innovation. As industry trends and Government policies continue to favor the outsourcing practice, there is insufficient data center floor area to satisfy a growing demand from corporations and the public sector. MetroNet offers data connectivity and data center services that address the underserved demand. MetroNet’s continuous success will have a powerful demonstration effect to other potential entrants in the market, from both the supply and demand side, and in the aggregate leading to a more competitive IT sector.

High quality employment creation. The IT sector creates high quality employment opportunities. GMN offers vocational and college graduates an attractive opportunity to apply their talents and knowledge to innovative technical solutions to corporate customers in various sectors (such as retail, banking and manufacturing). An additional benefit from the creation of these quality jobs is that they contribute to the retention of IT talent in the country.

Improved economic and energy efficiencies: data centers concentrate IT infrastructure from many individual companies, and in provisioning utilities such as uninterruptible power, air conditioning, connectivity and other IT services, providers of such services can achieve economies of scale and offer lower prices, that what individual organizations can achieve on their own. Additionally, by concentrating the IT infrastructure in fewer locations, improved energy efficiencies can be achieved and thereby lowering the impact on the environment.

IFC's expected development contribution

Access to Finance: Inadequate access to venture capital and bank financing are major hindrances for companies operating in the Mexican IT sector. This Project may be complemented by other initiatives, such as: (i) Advisory Services products which can make IT operations more efficient. Additionally, as the Company grows, IFC can provide additional financing as well as attracting new investors.

Access to IFC’s expertise: IFC has accumulated considerable expertise related to Information and Communications Technologies (ICT), including financing IT services outsourcing and ICT infrastructure projects; an expertise that is unmatched in emerging markets and that MetroNet appreciates and wants to tap.

IFC’s Stamp of Approval: MetroNet is positioned to grow significantly and expanding to new market where its branding is not as widely recognized. Outsourcing business requires a trust relationship and reputable credentials with clients. Having IFC as an investor will help the Company establish its credibility and provide additional comfort about its financial backing and reputation.

Governance strengthening: The Company has a formal board of directors and has done significant progress towards improving its corporate governance. The Company looks to IFC to assist in strengthening its governance, identifying potential independent directors, and other activities as needed, which will, in turn will boost its credibility to future investors.

Environmental and social issues - Category C

Environmental benefits are expected from refitting Metronet’s Interlomas Data Center, as well as from the mini strain system used to maintain its networks and corporate social responsibility efforts. Policies and procedures are in place to manage environmental and social risks and impacts throughout Metronet’s operations. Metronet will provide environmental and social reports to IFC on any issues and improvements as they may arise, and on an annual basis. Overall, the level of environmental and social risks and impacts in this project is low, so the project is classified as Category C according to IFC's environmental and social review procedure.

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