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Project Information

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature.
Project Name PT Natrindo Telepon Seluler
Guarantee Holder Deutsche Bank Luxembourg S.A.,The Saudi British Bank
Investor Country Luxembourg,Saudi Arabia
Host Country Indonesia
Sector Telecommunications
Gross Exposure ($million) 450
Fiscal Year 2011
Status Proposed
Project Number 8521
Environmental Category C
Date SPG Disclosed March 21, 2011
Projected Board Date April 28, 2011

This summary covers an investment by Deutsche Bank Luxembourg S.A. and The Saudi British Bank in PT Natrindo Telepon Seluler (NTS) in Indonesia. The investor has applied for a MIGA guarantee of $450 million for a period of up to seven and a half years against the risks of transfer restriction, expropriation, and war and civil disturbance.

This investment is part of a larger $1.2 billion financing package for NTS, holder of the registered brand “Axis”. The company is a national GSM and 3G cellular service provider in Indonesia, offering wireless communication services. The financing is aimed at increasing the quality on the existing network, increasing the population coverage, and building additional network capacity.

The portion of the financing that MIGA is proposing to insure is a dual currency term syndicate “Murabaha” facility with Deutsche Bank Luxembourg S.A. as Murabaha Investment Agent acting on behalf of itself and The Saudi British Bank, as well as other financial institutions to be identified. The initial participants are The Saudi British Bank and Deutsche Bank Luxembourg S.A. The facility will be syndicated following the financial close and depending on the commitments made by other financial institutions, the US Dollar and Saudi Riyal tranches may be resized. The facility may be taken out at a later stage in whole or part by a Sukuk issue for which the primary obligor will be NTS.

Environmental Categorization

The project is a Category C under MIGA’s environmental review procedures.

Development Impact

NTS has contributed to the development of a competitive telecommunications industry in Indonesia by providing mobile telecommunication services, including the installation, operation and maintenance of a GSM network; wireless communication services; internet; and satellite services. NTS is focusing its growth on lower-income segments of the market, so the beneficiaries of these services will be lower income households and remote islands. The spread of mobile telecommunications has been shown to stimulate local entrepreneurship and provide significant employment opportunities indirectly.

This widespread availability of telecommunications networks also provides a platform for the private sector and the government to deliver important services to under-served populations throughout Indonesia.

This project will contribute to the objectives of the World Bank Group’s Country Partnership Strategy for Indonesia by facilitating important private infrastructure investment in a sector which promotes the growth of private sector enterprises. The project is also aligned with MIGA’s strategic priority of promoting South-South investment.

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