MIGA Backs Telecom Project in Burundi
World Bank’s MIGA Backs Telecom Project in Burundi
WASHINGTON, DC, April 8, 2003—The Multilateral Investment Guarantee Agency (MIGA) announced today that it is providing $1 million in guarantee coverage for a cellular telecommunications project that aims to address the acute shortage of telephone services in the Republic of Burundi. The project marks the first time MIGA is supporting a project in Burundi.
The undertaking involves the buildup, operation, and maintenance of a nationwide mobile telephony network using the GSM 900 standard. The guarantee is protecting the investor, Mauritius Telecom Ltd., against the risks of transfer restriction, expropriation, and war and civil disturbance.
Already a poor, heavily indebted country, Burundi’s recent conflict is estimated to have set the country back 25 percent in terms of GDP growth over the past five years. Further hampering efforts to spur economic growth and investment is the extreme dearth of telecommunications infrastructure. Burundi’s teledensity (number of lines per 100 people) is less than 1 percent, one of the lowest levels in the world.
“Businesses simply cannot operate well with poorly functioning or nonexistent telephone services,” says Roger Pruneau, MIGA’s Vice President for Underwriting. “On top of that, new investors are scared away by the lack of solid telecommunications infrastructure. This project is a crucial springboard for growth on many levels.”
In addition to being the national operator of the Republic of Mauritius, Mauritius Telecom—in which France Telecom holds a 40 percent minority stake—also participates in joint–venture telecommunications services (mobile GSM) in Madagascar. The company is one of three that won 15-year licenses to operate in the Republic of Burundi (mobile GSM). Recent regulatory and institutional reforms carried out by the government, in coordination with the World Bank, were key to encouraging the private sector to bid on the licenses.
For information
Moina Varkie, mvarkie@worldbank.org, t. 202.473.6170