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Motorola is to help upgrade and expand Pakistan’s mobile phone network under a US$50mn contract which has been partly underwritten by the Export Credits Guarantee Department (ECGD), the UK’s official export credit agency.
The contract – which will be sourced from Motorola’s Swindon factory – will provide cellular phone infrastructure equipment to Pakistan Mobile Communications (PMCL) so it can expand cellular phone coverage across the country under its Mobilink brand name.
ECGD has guaranteed, under its buyer credit finance facility, a US$48mn bank loan, provided by both ABN Amro and Citigroup, which will be used by PMCL to help meet the costs of the Motorola contract.
Gerard Grady, senior manager at Motorola Credit Corporation, Motorola’s financing arm, said: “This deal is part of an ongoing expansion programme between Motorola and Mobilink which will further boost mobile phone usage in Pakistan.”
Mobile phone penetration in Pakistan currently stands at 8% and is expected to grow to 15% by the end of 2006.
In addition, France and Germany’s ECAs – Coface and Euler Hermes – have provided support to their exporters Alcatel and Siemens respectively for supplying additional equipment to PMCL.
These two further contracts will also fund the growing infrastructure requirements of Mobilink.
Mobilink’s chief executive officer Zouhair Khaliq says: “Mobilink’s subscriber base has grown eight times in the last two years and, as we prepare to double network capacity again, we welcome the support of ECGD and other export credit agencies in this growth phase.”
The US$48mn loan guaranteed by ECGD, along with the €
170mn loans underwritten by the French and German agencies, represent the largest ECA-backed loan to Pakistan’s private sector.
This is also the first multi ECA-supported structured financing deal for the telecoms sector in Pakistan since 1998.