MIGA has provided Mauritius Telecom Ltd. of Mauritius with a guarantee for $910,612 to provide coverage for its equity investment of $1.01 million in Africell S.A. (Africell) in the Republic of Burundi. The guarantee is for a period of ten years and provide coverage against the risks of Transfer Restriction, Expropriation, and War and Civil Disturbance.
The project consists of the development, operation, and maintenance of a nationwide mobile telephone network using the GSM 900 standard. It will help alleviate the acute shortage of telephone services in Burundi. The country has a teledensity of less than 1 percent, among the lowest in the world.
The Africell project has numerous direct and indirect development impacts for Burundi. The addition of a new competitor in the cellular telephone business will contribute to lower prices, broader geographic penetration, and higher quality of service. In addition to increasing teledensity levels to both urban and rural areas without previous service, the improvement in reliability should lead to higher efficiency and productivity of other economic activities. The project will also have a positive demonstration effect on other foreign investors as the improvement in the telecommunications infrastructure will help make the country more appealing to investors in other sectors of the economy.
The project is expected to generate 60 local permanent jobs and an additional 30 jobs during the construction phase. Additional employment will be generated for support activities and training will be provided both on site and in Mauritius. The project is expected to generate over $2.3 million in income tax revenues for the government during the first five years of operations.
In addition to being MIGA's first project in Burundi, Africell S.A. addresses four of MIGA's priority areas being an investment in Africa, an IDA host country, a "South-South" investment, and an SME investment.