IFC bankrolls wholesale first in Kyrgyz Republic, backs Liquid in Africa
IFC, part of the World Bank Group, is to loan US$3 million to the Kyrgyz Republic's largest private wholesale broadband operator, its first investment in the country.
The loan will be provided to ElCat LLC, the country's largest private wholesale broadband operator, to increase fibre coverage in underserved areas, enabling mobile and fixed broadband connectivity.
ElCat CEO Ulan Tolubaev, said: "We are confident that expanding the country's telecommunications infrastructure will spur innovation, productivity, efficiency, and transparency across sectors. With IFC's funding, we plan to expand our network, improve affordability and increase access to high-speed internet connectivity for households, businesses, and public sites—schools, health-care centers, and government offices—including locations in remote parts of the country."
Due to its geography and landlocked borders, the Kyrgyz Republic's limited international bandwidth has delayed the adoption of broadband technologies and internet usage, especially in rural areas.
With some estimates pegging the fixed broadband penetration rate at about 19%, access to high‐speed internet remains limited and costly for individuals and businesses. Meanwhile, IFC said average fixed and mobile broadband internet speeds are "well below the global average".
Cassandra Colbert, IFC regional manager, said: "One of IFC's strategic priorities in the Kyrgyz Republic is to advance digital inclusion by improving digital connectivity. This will help boost productivity, create jobs, and increase access to essential services. By providing financing to ElCat, we can help lay the groundwork needed to drive innovation and bring the power of the Internet to more people and businesses in the Kyrgyz Republic."
Meanwhile in Africa, last week Liquid Telecom said it would seek US$820 million in a bond and term loan financing package. After the bonds were issued on Thursday, the transaction closed on $840 million, comprising a $620 million bond and a $220 million equivalent South African Rand term loan.
Over the weekend, IFC said it "played an anchor role", subscribing to 16% of the bond, equivalent to $100 million, which was listed on Euronext Dublin, Ireland's main stock exchange, on February 25.
Stephanie von Friedeburg, Interim MD and EVP, and chief operating officer of IFC, said: "Our best chance at ensuring much-needed internet access for everyone in Africa, from large corporates and small businesses to individuals, is to invest in digital infrastructure. Our investment in the Liquid Telecom bond will help the company free up capital to further expand broadband access across Africa, laying a solid foundation for a faster, more resilient recovery."
Liquid's group CEO Nic Rudnick added: "We are delighted that IFC has taken a significant anchor position in our new bond. In the countries in which we operate there are great opportunities to address under developed telecommunications and Internet access, as well as to accelerate the adoption of digital and Cloud-based services."
He added: "Our refinance enables us to continue to invest in the African digital eco-system including driving penetration of digital and Cloud-based services to businesses who may not previously have had the resources to benefit from them, helping to bridge the connectivity divide, which is more crucial than ever in our current circumstances."
IFC estimated that Africa's digital economy will be worth $180 billion by 2025.