PCS Holding Sierra Leone Ltd.

MIGA has issued a $3.4 million guarantee to Sierra-Com of Israel for its equity investment in PCS Holding Sierra Leone Ltd. of Sierra Leone. Sierra-Com owns 85 percent of the company, while a local Sierra Leonean partner, Firstcom, owns the remaining 15 percent. The guarantee is a standardized package that protects against the risks of transfer restriction, expropriation and war and civil disturbance, for a period up to three years. It represents the first guarantee issued under MIGA’s new Small Investment Program (SIP), which streamlines and expedites the underwriting process for eligible small and medium-size investors.

The investment involves the establishment of fixed line, state-of-the-art broadband wireless access and a voice over IP network (allowing phone calls to be made over the Internet) in Sierra Leone, a nation with one of the lowest teledensities in the world. The project enterprise, PCSH, will offer broadband Internet at speeds of up to 2MBps and reliable local and international telephone service, filling a void in the country, where the only available Internet service is slow and connections spotty. The company will operate initially from three sites in the capital, Freetown. To keep the network running despite regular power outages across the country, PCSH is installing its own system of back-up generators.

Sierra Leone is among the most impoverished nations in Africa, with a recent history of violent conflict and with multiple development needs. It is expected that the availability of low-cost, high-speed Internet and wireless capabilities will encourage more local business start-ups and more foreign direct investment, an important part of the effort to build up the country’s economic base and reduce poverty.

MIGA’s participation in the project supports several agency priorities: encouraging new investment in conflict-affected nations, assisting smaller investors, and supporting local small business development. The World Bank is also active in the country, through new efforts to reform the country’s telecommunication laws, a process that will help ensure the integrity and viability of the licensing agreement.