On June 28, 2018, MIGA agreed to issue up to EUR 83,997,000 (~U.S. $97.2 million) in guarantees covering SONATEL S.A. of Senegal's equity investment for the acquisition of Orange (SL) Limited (OSL) in Sierra Leone. The guarantees are being issued for up to 15 years against the risks of expropriation, and war and civil disturbance.
The project consists of the acquisition of and investment in Airtel Sierra Leone Ltd (renamed Orange Sierra Leone), an existing mobile operator and leader in 2G and 3G mobile services in Sierra Leone. SONATEL and its partner Orange S.A., via its Middle East and Africa subsidiary (OMEA), acquired OSL in equal shares in July 2016, to modernize and expand telecom infrastructure and services in the country, notably in underserved and rural areas. This includes: i) Upgrading existing assets; ii) Expanding network coverage by deploying approximately 100 new tower sites by 2024 (from 300 in 2018); iii) Improving network quality and reliability; and iv) Rolling-out new services including mobile banking. From approximately 1.4 million subscribers in 2017, OSL is expected to reach over 3.3 million subscribers in 2020 and 4.6 million in 2024, in line with the Government of Sierra Leone’s efforts to increase the nationwide access of mobile telecommunications (from 60% in 2017 to over 90% by 2024).
MIGA’s risk exposure under the guarantees is proposed to be shared with the IDA Private Sector Window (PSW) under the MIGA guarantee facility (MGF).
The project is a category B under MIGA’s Policy on Environmental and Social Sustainability. Click here to view the Environmental and Social Review Summary prepared for the project.
By investing in the expansion and improvement of mobile telephony and broadband infrastructure and services, the project has wide-ranging developmental benefits, notably on poverty reduction and economic growth through the facilitation and enhancement of trade and competitiveness at local and regional levels. Improved telecommunication services are expected to support information flow to and between individuals and businesses, promote good governance, and strengthen social capital, as demonstrated by the positive impact of ICT penetration rates on the level of economic development in low and middle-income economies. The telecom sector also represents a significant source of fiscal revenue in emerging countries.
MIGA’s proposed support for this investment is aligned with the Agency’s priorities of supporting investments into countries eligible for IDA financing as well as conflict-affected states (FCS). It is also aligned with the most recent joint country engagement strategy from the World Bank Group (WBG) and the African Development Bank (AfDB), the Joint Country Assistance Strategy (JAS) for Sierra Leone spanning FY2010-13, which emphasizes the importance of promoting inclusive growth by improving the standard of Sierra Leone as an investment destination and supporting job creation.