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Projects

Summary of proposed guarantee

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. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
Regional Telecom, Iraq
Project ID
11370
Fiscal year
2013
Status
Active
Guarantee holder
Alcatel-Lucent International
Investor country
France
Host country
Iraq
Environmental category
B
Sector
Telecommunications
Date SPG disclosed
May 29, 2013
Project Board date
June 28, 2013
Gross exposure
 $10.6 million
Project type
Non-SIP
Strategic priority area
Conflict Affected
ESRS
Environmental and Social Review Summary for Regional Telecom, Iraq

Project Description

This summary covers an investment by Alcatel-Lucent International (AL) of France in Regional Telecom (RT) in Iraq. The investor has applied for a MIGA guarantee of $10.6 million for a period of up to three years against the risks of transfer restriction, expropriation, and war and civil disturbance.

The project involves vendor financing from AL to RT for a high speed mobile broadband data and internet service provider in Iraq. This investment is part of a three-phase engagement. In the first phase, to be covered by the proposed MIGA guarantee, AL is providing equipment, installation of infrastructure, and deployment of 4G/LTE covering four cities in Kurdistan. RT’s longer-term business strategy is to achieve 65 percent geographical coverage across Iraq. AL will also advise RT on improving operational functions such as corporate governance, financial reporting standards and risk management to help RT conform to international best practices.

Environmental Categorization

The project is a category ‘B’ under MIGA’s Policy on Social and Environmental Sustainability. Click here to view the Environmental and Social Review Summary.

Development Impact

The proposed project is expected to expand Iraq’s information and communications technology sector by providing high-speed mobile data and voice (VOIP) services to the main cities in the Kurdistan region. Iraq’s mobile market is one of the least developed in the Middle East, with a sole regional operator providing mobile broadband services using 3G technology and fewer than 750,000 subscribers out of a population of nearly 33 million with access to any sort of 3G mobile service.

The investment will create a demonstration effect for other operators to invest in the sector and will open up access to the internet in many areas where no fixed line access exists. The expected developmental benefits of expanded mobile connectivity include enhanced knowledge and skills and increased private sector productivity.

The project is aligned with the World Bank Group’s Country Partnership Strategy for Iraq, which notes that the country’s telecommunications sector is under-exploited. MIGA’s proposed support for this investment is also aligned with the Agency’s strategy of supporting investments in conflict-affected countries and its efforts to mobilize $1 billion in insurance capacity to support foreign direct investment into the Middle East and North Africa.

 
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