IFC, a member of the World Bank Group, has provided a US$90 million loan and mobilized an additional US$70 million in syndications to help Zain Ghana expand its mobile network.
"Our subscriber base in Ghana already exceeded one million and this investment will enable us to scale up our operations and provide affordable and reliable communications services to a much larger part of the population," said Zain Ghana Country Manager Philip Sowah. "IFC has brought in a significant number of regional, long-term commercial investors -- a great vote of confidence for this frontier market, particularly in the current economic crisis."
After acting to liberalize the telecommunications sector and promote competition, Ghana has experienced significant growth in the availability of telecommunications services, at lower costs to consumers. At 45 percent, the mobile penetration rate is higher than in other countries in Sub-Sahara Africa with similar per capita incomes. Still, Ghana's teledensity is concentrated in urban areas, leaving the penetration rates in rural and semi-urban areas well below 10 percent due chiefly to capital, infrastructure, and affordability constraints.
Stephanie von Friedeburg, IFC Senior Manager for Global Information and Communication Technologies, said, "IFC is pleased to support Zain Ghana in offering access to affordable, quality service beyond large cities to remote and rural areas across Ghana. This fits well with IFC's objective to support the government in making available affordable telecommunications services to underserved populations."
The syndicated loan, in the form of an IFC B-loan and a parallel loan, has a seven-year tenor and was over-subscribed by 30 percent. The IFC B-loan was provided by Cordiant Capital, the Emerging Africa Infrastructure Fund Limited, FirstRand Bank Limited, and the Netherlands Development Finance Company. IFC is acting as a lender of record for the B-loan participants and as an agency vis-à-vis the parallel lender, the OPEC Fund for International Development, simplifying communications between Zain Ghana and the lenders.