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MTN Afghanistan

$80.4 million
Project Brief

On July 7, 2011, MIGA issued guarantees totaling $80.4 million to MTN Group Limited of South Africa for its investment in MTN Afghanistan (MTNA), formerly known as Areeba Afghanistan LLC. The coverage is for a period of up to 10 years against the risks of transfer restriction and expropriation. 

This issuance replaces an earlier contract of guarantee for $76.5 million issued by MIGA that covered investments into the first phase of the project. MIGA’s gross exposure under the project now stands at $154.9 million. The additional coverage is supporting the expansion of operations by MTNA, which is being financed through a shareholder loan and an equity investment from its holding company MTN Dubai Limited. (MTND). The purpose of the new investment is to improve MTNA’s mobile communication services, increase geographical coverage, and enhance quality of signal. An additional amount of $1.9 million of first-loss coverage is insured under the Afghanistan Investment Guarantee Facility (AIGF).
MTNA has contributed to the development of the telecommunications sector in Afghanistan and continues to do so by providing mobile telecommunication services, including the installation, operation, and maintenance of a Global Systems Mobile (GSM) network, wireless communication and internet services. Afghanistan’s mobile network has increased by seven-fold in the past five years from two million mobile subscribers in 2006 to around 13.7 million in 2010, with a penetration rate of 47 per 100 inhabitants. MTNA is playing an important role in helping expand coverage in remote areas of the country, with the number of subscribers expected to grow to over 18 million by 2014.

This project is aligned with the World Bank Group’s Interim Strategy for Afghanistan which includes “supporting growth of the private sector” as one of the three strategic pillars. Mobile telecommunications are fundamentally important to the operations of the wider private sector in Afghanistan. This project is also aligned with MIGA’s objectives of encouraging investments in conflict-affected countries, promoting "South-South" investments, and facilitating investments in infrastructure, including telecommunications. MIGA’s participation in the project also complements the work of the IFC, which has an equity stake in this project and is also providing debt financing.