IFC, a member of the World Bank Group, is supporting economic growth and expanded access to telecommunications services in Iraq through a landmark $400 million, seven-year debt facility for Zain Iraq, the country’s largest mobile phone operator.
Zain Iraq is a subsidiary of Kuwait-based telecommunications operator Zain Group, a longtime IFC partner. Zain is the pioneer in delivering high-quality and innovative communications services across the Middle East.
Over the last four months, with the support of Zain Iraq, IFC mobilized the $400 million debt facility, which consists of an IFC (A) loan of $155 million, a $50 million (B) loan committed by Ahli United Bank, and four syndicated parallel loans totaling $195 million by Proparco, Infrastructure Crisis Facility, DEG (Deutsche Investitions- und Entwicklungsgesellschaft mbH), and FMO (Netherlands Development Finance Co). The long-term debt facility will help Zain Iraq expand service coverage and improve telecommunications quality throughout Iraq, help unlock opportunities for entrepreneurship and innovation, and increase employment in a key, industry which has enormous multiplier effect across many other industries .
Zain Group CEO, Nabeel Bin Salamah, said, “This debt facility is an enormous vote of confidence by the IFC and the international financial community in Zain Iraq’s performance to date and its future expansion plans in a diverse and promising economy. The financing comes at a vital stage of the mobile operations business growth cycle as it expands to serve a relatively low-penetrated, yet high-potential mobile market."
Dimitris Tsitsiragos, IFC Director for the Middle East, North Africa and Southern Europe, said, “For conflict-affected countries such as Iraq, where the movement of people and goods is complicated, access to reliable, high-quality voice and data services is key for economic activity and for personal and family safety. This facility demonstrates IFC’s commitment to supporting economic integration by facilitating cross-border investments within the region.”
IFC brought together the commercial bank syndication market and the development finance community to provide access to different sources of financing for Zain Iraq and to help promote the development of a syndicated loan market in Iraq.
Zain Iraq provides a multitude of mobile voice and data services to 12 million customers, representing over 50 percent of the country’s mobile phone market.
IFC’s other investments in Iraq-based firms and MENA firms undertaking projects in Iraq total $173 million, and include equity stakes in two banks and a cement producer, as well as loans for port and hotel construction.