Cordiant Capital, the Montreal based fund manager that specialises in loans to emerging markets, has committed $50 million to fund the expansion of Iraq’s mobile phone network.
Mobile penetration in Iraq is estimated at just 77%, lagging far behind most of its neighbouring countries where penetration rates are virtually 100%.
The loan is part of a $400 million long term financing for Zain Iraq, the country’s largest mobile phone operator, to improve access to network coverage for remote populations. A reliable telecommunication service is instrumental to the growth of Iraq’s economy as it seeks to diversify itself outside of the oil & gas sector. Zain Iraq is a subsidiary of the Kuwaiti Mobile Telecommunications Company K.S.C.
Cordiant is providing the loan on behalf of the Infrastructure Crisis Facility Debt Pool “ICF Debt Pool”), which was conceived by the International Finance Corporation and developed on the Private Infrastructure Development Group platform (www.PIDG.org) to help make up for the collapse in emerging market infrastructure lending caused by the global banking crisis. Its €500 million capital is provided by KfW, the German development bank, on behalf of the Federal Republic of Germany.
David Creighton, President and CEO of Cordiant Capital, says: “Iraq’s need for infrastructure is immense. So far, foreign direct investment has been very scarce apart from in the oil & gas industry. As a result, the country’s economy is highly dependent on oil whilst other business sectors are extremely under developed.”
“Improved access to mobile telephony will facilitate the growth of small business, promote entrepreneurship and increase job creation in all sectors.”
Andy Bainbridge, Chairman of the Board of Directors of the ICF Debt Pool, says: “The relatively low mobile phone penetration rate in Iraq means that the market has a great potential for growth in the next ten years, making this an attractive deal for our long term investors.”
“We have carefully assessed the risks to telephony infrastructure in Iraq and are comfortable that this deal is well within our parameters.”
The Infrastructure Crisis Facility Debt Pool funding is part of a $195 million syndicated parallel loan with FMO, the Netherland’s Development Finance Institution; Proparco, the French Development Finance Institution; and DEG, Deutsche Investitions – und Entwicklungsgesellschaft mbH. In addition, the IFC is providing a $155 million A loan and syndicated a $50 million B loan to Ahli United Bank.
About Cordiant Capital
Founded in 1999, Cordiant pioneered the creation of emerging market corporate loan funds that invest in partnership with International Financial Institutions. Cordiant has managed over $2.2 billion in subscriptions from some of the world’s largest institutional investors in three emerging market loan funds, the ICF Debt Pool, and one private equity fund, the Canada Investment Fund for Africa. The firm has made investments in nearly 200 companies in more than 50 countries. It has exposure to all major sectors, including a large number of infrastructure investments. Cordiant is a signatory to the UN Principles for Responsible Investment.
The ICF Debt Pool
The ICF Debt Pool provides loans to the infrastructure sector in emerging markets where financing has been displaced due to the global financial crisis. It is part of the Infrastructure Crisis Facility which has mobilized over $4 billion from international financial and development institutions. The ICF Debt Pool was launched at the annual meetings of the World Bank Group in October 2009, and was awarded to Cordiant to manage following a competitive selection process involving financial institutions from around the world. The IFC estimates that $21 trillion will be needed to fund emerging market infrastructure projects in the next ten years.To date, the Federal Republic of Germany, through KfW, has committed €500 million to the ICF Debt Pool. Another €100 million is expected shortly.
President and CEO
Cordiant Capital Tel: + 1 514 286 1142 [email protected]
Nick Mattison or Fay Israsena
Mattison Public Relations
Tel: +44 (0) 20 7645 3636