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EBRD provides US$ 66.6 million for telecom project in central Europe
The final pieces of the Central Europe Telecommunications Agency Line (CETAL), a US$ 100 million credit line specifically targeted at telecommunications projects in central Europe, have been put into place. Framework agreements have been signed by the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC), ABN AMRO Bank NV and one local bank in the Czech Republic (Zivnostenska Banka), Hungary (Magyar Külkereskedelmi Bank) and Poland (Polski Bank Rozwoju SA). The EBRD is providing a total financing package to CETAL of up to US$ 66.6 million (ECU 51.2 million).
Clell Harral, Director of the EBRD’s telecommunications team, said: “Establishing a credit line means that the EBRD is able to support private sector development in the telecom sector. We already have a strong pipeline of projects, so direct benefits such as improved access and quality of telecom services should be felt very quickly.”
CETAL will provide loan and equity financing in US dollars as well as local currency for telecommunications companies offering both basic services and specialised functions such as data networks, paging and cable television.
The governments of central Europe have issued licences to private operators to build and operate regional and specialised networks in order to modernise and develop the telecommunications infrastructure. Many of these new networks are expected to be small, with financing needs ranging from US$ 5 million to US$ 30 million. CETAL is expected to finance projects with an aggregate cost of US$ 200-300 million.
The EBRD’s financing package comes in two parts: loans of up to US$ 26.6 million and equity of up to US$ 6.7 million, and a syndicated loan of up to US$ 26.6 million and equity of up to US$ 6.7 million for the participating bank (ABN AMRO Bank). The agent bank for the syndicated loan is ABN AMRO Bank NV.
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