Publish Date : 08-Mar-2019
IFC, a member of the World Bank Group, agreed to provide a loan for up to US$450 million to Telecom Argentina, one of the leading telecommunications companies in the country that offers fixed and mobile high-speed connections and pay tv, through an integrated content platform, to boost the expansion of broadband coverage with a focus on underserved regions in Argentina. The financing package includes US$110 million from IFC, with the additional funding to be mobilized by IFC from international banks.
IFCs financing will help improve Argentinas mobile and fixed broadband infrastructure through the installation of high-speed fiber optic and the upgrade of wireless transmission equipment by Telecom Argentina. This second financing follows an earlier one in 2016 and will help revert a decade-long trend of underfunding in Argentinas telecommunications sector which has hampered coverage, quality of services and data transmission speeds, particularly outside the city of Buenos Aires.
Carlos Moltini, CEO of Telecom Argentina, said: our partnership with IFC is the result of the strength of the project we are developing in this stage of Telecom, which is focused on generating a qualitative jump in terms of coverage and the capacity and quality of our networks and services. We know that these are key factors for the development of the country.
While Argentinas telecommunications sector compares favorably to other countries in Latin America with respect to some indicators such as mobile broadband penetration, capital expenditures represent only about 0.5 percent of the countrys gross domestic product (GDP) versus one percent for other countries in the region such as Colombia, Chile, Mexico or Brazil. There is also an acute digital divide between urban centers and other regions of the country.
Over the past three years, IFC has invested over US$1.8 billion in telecommunications, technology, and startup companies globally. As part of IFCs global digital infrastructure initiative, IFC investments in the telecommunications sector aim to partner with mobile and broadband service providers to support their expansion and upgrading of their network infrastructure. Increased broadband connectivity facilitates international economic integration and the development of a digital economy. Inclusive access to the Internet also contributes to more productive small enterprises, as well as to more transparency and efficiency in the provisioning of government services.
Aniko Szigetvari, Global Head of Telecommunications, Media and Technology at IFC, said: IFCs follow on investment in Telecom Argentina reinforces our commitment to support the expansion of broadband connectivity and the development of the countrys digital economy. Argentina is the Spanish speaking country with largest land mass in the planet and the needs to connect it are vast. We are pleased to support an important client such as Telecom Argentina as it doubles down in this effort. We are confident that upgrading Argentinas telecommunications infrastructure with the support of IFC will spur innovation, productivity, efficiency and transparency across all economic sectors.
IFCs strategy in Argentina is focused on financing projects with significant development impact for spurring economic growth, innovation and job creation. Priority sectors include agribusiness, infrastructure, telecommunications, renewable energy and competitive manufacturing. IFC initiatives are geared at strengthening long-term financing for companies, including small and medium enterprises (SMEs), and helping to improve investment climate for business start-ups and SME growth.
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