Wataniya Palesti

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	25620
Company name	Wataniya Palestine Mobile Telecommunication Company
Country	West Bank and Gaza
Sector	Information
Environmental category	B
Department	Global Inform. & Comm. Tech.
Status	Pending Approval

Date SPI disclosed	August 27, 2008
Projected board date	September 29, 2008

View Environmental & Social Review Summary (ESRS), click here

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

The project consists of the construction and operation of a greenfield mobile cellular telephone network in the West Bank, Palestian Territories. The project will be implemented by Wataniya Palestine Mobile Telecommunication Company Limited (Wataniya Palestine or the company), a company owned 57% by Wataniya International FZ LLC, which is turn is 51% owned by the Qatari incumbent Qatar Telecom, and 43% by the Palestine Investment Fund. Wataniya Palestine was awarded the second GSM mobile license in West Bank/Gaza in March 2007 through an open tender process for $354 million equivalent.

Anticipated development impact of the project

The project will offer a wide range of standard and value added mobile services in Palestine; given the poor state of the existing telecommunications infrastructure in the country, the project will have a significant development impact for both individuals and businesses. Teledensity (both fixed and mobile) is low by regional standards; mobile service remains expensive and is accompanied by poor coverage, thus delaying the spread of mobile services to low income urban and rural communities. The Project will improve access to reliable and affordable telecommunication services for consumers and businesses in Palestine and the Company projects that mobile penetration will increase from 36% at project launch to 58% by 2016.

The project will also support the telecom liberalization process intiated by the Palestinian Authority with the help of the World Bank. The telecom law of 1996 created the fixed and mobile licensing framework for the incumbent Paltel and also enabled the introduction of competition through the award of a second mobile license in December 2006. A new telecom law is currently under review, which will introduce modern principles of regulation and competition in the sector. The project will support this process, with the planned IPO of the company in early 2009 being a further step towards full sector liberalization.

IFC's expected development contribution

By supporting the project, IFC will provide long term financing in a priority frontier market 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 an emerging competitive telecommunications market develop, improve the efficiency of the business sector and increase connectivity between Palestine and the global community. Furthermore, through this project, IFC will be promoting South-South investment and will be developing a relationship with a strong regional operator, Q-Tel, who has demonstrated a clear track record of positive developmental impact in all geographical areas it operates.

Environmental and social issues - Category B

IFC's early review of this investment has identified the following environmental, social, health and safety issues:

- the company's management system for environmental, health and safety issues;
- tower siting and land use issues;
- compliance with national, local, and IFC standards;
- impacts on environmentally or culturally sensitive areas;
- storage, treatment and disposal of hazardous material (e.g., fuel oil, PCBs and CFCs including Halons); and
- fair, safe and healthy working conditions.

Based on this early review, it is anticipated that this project will require 30 days disclosure by IFC prior to Board and has been provisionally categorized as B.

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