MIGA has issued a guarantee of $59.4 million to Société Nationale des Télécommunications du Sénégal (Sonatel), covering its $112.25 million equity investment in Orange Guinée S.A. The 10-year coverage provides protection against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract.
The project involves the operations and maintenance of a GSM cellular network in Guinea. The license and concession agreement provided by the government of Guinea require Orange Guinée to roll out coverage to all of Guinea’s geographic zones within two years.
This is one of the largest foreign investments made in Guinea, and is expected to offer a number of benefits. The project will generate government revenues in the form of taxes and fees, including an $18.75 million license fee. Orange Guinée will provide direct employment and training to 400 Guineans.
Subscribers will benefit from reduced costs due to increased competition and the diverse product offerings. The nationwide coverage that Orange Guinée will provide within two years will open up access to populations who are underserved or have no access to telephone services, particularly in rural areas.
This project is aligned with the World Bank Group’s support to improving Guinea’s investment climate. Overall growth and economic diversification in the country have been hampered by a weak investment climate, including weaknesses in the telecommunications sector.
Without the MIGA coverage, Sonatel would not have committed to the investment. MIGA’s participation in this project supports several agency priorities including South-South investment, investment in Africa, and investment in the infrastructure sector.