The Export Credits Guarantee Department (ECGD), the UK’s official export credit agency, has underwritten two UK-sourced contracts totalling US$30mn which will help expand mobile phone networks in Kazakhstan.
The two contracts, which were awarded to Motorola under a five-year frame agreement announced in May 2005, are for GSM cellular phone infrastructure equipment and associated software supplied from the UK company’s Swindon facility to KaR-Tel, Kazakhstan’s second largest mobile phone operator.
Kazakhstan is ECGD’s most active market in Central Asia.
Under this phase of the network expansion, ECGD guaranteed a US$28mn finance facility made available by Citigroup for the purchase of the equipment by KaR-Tel. OJSC VimpelCom, KaR-Tel’s parent company, provided additional security to support this transaction.
Yusuf Khan, vice-president in Citigroup’s Export & Agency Finance Group, says: “This deal involves the first ECGD-supported supplier credit facility for Citigroup in the Kazakhstan telecoms market. ECGD’s guarantee allowed Citigroup to provide the maximum loan period possible for KaR-Tel.”
Mobile phone penetration in Kazakhstan currently stands at 13% although potential growth is strong, given the country’s oil-rich status.
KaR-Tel has about 31% share of the country’s cellular phone market.