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Syrian Arab Republic

MTN Syria

$156.4 million
Summary of Proposed Guarantee
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This summary covers an equity investment and a shareholder loan from MTN Dubai Ltd. (MTND) in MTN Syria (MTNS). The investor has applied for MIGA guarantees for a period of up to ten years against the risks of transfer restriction, expropriation and breach of contract. MIGA’s gross coverage under this guarantee would be up to $156.4 million.

This project involves an expansion of operations by MTNS through an equity investment and a shareholder loan from its majority shareholder MTN Dubai Ltd. (MTND owns 75 percent of shares of MTNS, the balance of 25 percent is owned by Teleinvest Ltd.). The purpose of the investment is to increase geographical coverage, improve quality of signal, and offer better mobile communication services. MIGA is currently covering $75 million of MTND and Teleinvest Ltd.’s investment on a pro-rata basis in MTNS. The proposed new coverage will replace MIGA’s existing contract of guarantee.

MTNS provides mobile telecommunication services, including the installation, operation, and maintenance of a GSM network; wireless communication services; and internet and satellite services across Syria. The wireless subscribers have increased four times in the past five years and, as MTNS expands, these are expected to grow over 15 million with the market-penetration rate expected to reach 65 percent in the next three years.

Environmental Categorization

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

Development Impact

Since entering the Syrian telecom market in 2004, MTNS has helped improve the telecom infrastructure, increase coverage, raise the standard of service, and introduce new products. The benefits of this accrue to the local population, especially small business, through increased connectivity, better quality of service, and better choice of plans. The project relies on domestic companies for advertising, engineering, IT and software companies, cable installation and construction, and is fostering development of local enterprises. In addition, MTN has introduced greater transparency in terms of financial and operational disclosure policies and reporting for the telecom sector.

The project addresses two of MIGA’s priority areas: supporting investments in infrastructure, especially in challenging markets, and supporting South-South investment. It also represents an integrated complement to the World Bank and IFC’s efforts to foster foreign direct investment in the country, as well as improving the performance of the telecommunications sector.