Orange Telecom Project in Liberia
This summary covers US$80.1 million equity investments from Orange Cote d’lvoire Participations (“OCIP”) of Cote d’lvoire to Orange Liberia, Inc. (the “Project Company”), including US56.1 million for acquisition of an existing telecom company and US$24 million of future retained earnings as an additional investment for expansion of telecom operations in Liberia (the “Project”). OCIP has applied for MIGA guarantee to cover its equity investments for a guarantee period of up to nine years against the risks of Expropriation and War and Civil Disturbance.
The Project involves the acquisition of Orange Liberia, Inc. (formerly known as Cellcom Telecommunications Inc) and the expansion of the telecom operations in Liberia, including (i) construction of telecom infrastructure (i.e., construction of telecom towers and installation of fiber optic cable) and (ii) provision of mobile finance services and other telecom services (including mobile services, fixed services, and e‑services). The total investment for the Project is estimated at US$286.66 million while MIGA is requested to cover part of the total investment. The revenues for the recovery of these investments and future retained earnings will come from the Project Company’s cash flows generated from its telecom operations in Liberia. Given Liberia is an IDA-eligible country, the Project is expected to use IDA IFC-MIGA Private Sector Window/MIGA Guarantee Facility (“MGF”) to mitigate project risks.
Liberia’s socio-economic development has been constrained by the poor telecom infrastructure due to civil wars. Although some progress has been made over the past years, Liberia’s telecom services are still among the lowest in the African region especially in terms of mobile and internet penetration rates. Benefiting from Orange’s strong expertise and world-class technical capacity and additional investment for the construction of telecom towers and fiber optic cable, the Project is expected to increase telecom access and improve the country’s telecom services, and therefore contribute to poverty reduction and economic development in Libera.
The Project is aligned with the World Bank Group (“WBG”)’s Country Partnership Strategy (“CPS”) for FY2019-2024 in Liberia and particularly well aligned with pillar (iii) outcome “increased ICT penetration by expansion of access to internet services and digital economy”. The Project supports WBG’s twin goals of eliminating extreme poverty and boosting shared prosperity. The Project is also aligned with MIGA’s FY21-23 Strategy by increasing investment and expanding development impacts in an IDA eligible country. The Project may be eligible for climate mitigation finance tagging as a significant share of the telecom towers are likely to be powered by solar-hybrid technologies. Finally, the Project is consistent with the Government of Liberia’s medium-term development strategy by promoting private sector development and narrowing infrastructure gaps, and Liberia ICT Policy (2019-2024) that seeks to support economic development through fully integrated information and communication technology and ensure total social inclusion for all Liberians.