IFC and EDC support Papua New Guinea telecoms deal

IFC and Export Development Canada (EDC) have signed a US$92mn financing agreement with Digicel to help widen a GSM network throughout Papua New Guinea.

The project is expected to expand the reach of telephone service to areas not reached by existing service providers. It also aims to improve service quality, stimulate competition in the telecoms sector and generate employment.

The financing package consists of a US$92mn long-term deal arranged by IFC and EDC and a local commercial bank. The IFC is financing US$40mn and EDC is financing US$25mn.

"The project in Papua New Guinea builds on our strong relationship with Digicel in the Caribbean,” comments Rajesh Sharma, head of structured finance at EDC.

"This relationship has helped open up several new markets for Canadian suppliers and has introduced advanced Canadian technologies. We support Digicel in its strategy for Pacific operations, which will enable us to develop additional markets for Canadian suppliers.”

Richard Ranken, IFC director for East Asia and Pacific, adds: “This project is in line with our strategy to work with strong sponsors in frontier countries and regions. “We are privileged to collaborate again with Digicel on a large private sector project in a challenging environment, reaching many poor people and improving their lives.”

Digicel was launched in the South Pacific in November 2006, and has become one of the fastest-growing mobile operators in the region, with operations in Samoa and Papua New Guinea. Both Fiji and Vanuatu have granted licences to Digicel and in November 2007 Digicel Pacific announced the acquisition of TonFon in Tonga.