The European Investment Bank (EIB) is lending a total of EUR 200 million to TIM Celular S.A. and its subsidiary TIM Nordeste S.A for the expansion of their mobile digital communication networks in Brazil using 2G and 3G technologies. This represents the first project funded by the EIB to include UMTS broadband technology outside Europe.

The project concerns the expansion of second generation mobile technology (GSM and data-related GPRS and EDGE upgrades) in particular to low-income regions, the phasing out of inefficient technology and the development of a third generation mobile network (UMTS/IMT-2000). The third generation network provides for high-speed data communication, enabling access to high-speed internet, television and other services by mobile phone.

Overall, the project will promote local economic growth through the development of innovative IT infrastructure, hardware and software applications, as well as the improvement of internet, multimedia and telecom services in the country. As part of the Telecom Italia group, which is a major fixed and mobile operator in Europe and has subsidiaries in many foreign markets, TIM is Brazil's second-biggest mobile player with over 25% market share, and has more than 10 years’ experience. In line with the objectives set for EIB financing in Asia and Latin America by the European Council Decision of 19 December 2006, the project will foster the transfer of economic and technological knowledge by supporting a well-established European company diversifying through FDI into Latin America. In addition, it will promote the EU policy objectives for the region, particularly regarding interoperability and roaming, and help to support the competitiveness of the European ICT industry.

Background

The EIB is the European Union’s long-term financing institution. In 2007, the EIB provided loans totalling some EUR 48 billion. Under its current mandate (ALA IV), covering the period 2007-2013, the EIB has been asked by the EU Council to lend up to EUR 2.8 billion in Latin America for financing operations supporting EU cooperation strategies and complementing other EU development and cooperation programmes and instruments in the region. An additional EUR 3.0 billion is available for financing energy security and sustainability projects in investment-grade countries, including in Latin America, over the same period.

Brazil is the main Latin American beneficiary country of EIB loans for investment in productive activities and the largest recipient of EU foreign direct investment in the region. The EIB has so far extended 24 loans totalling EUR 1.4 billion, representing some 48% of its overall activity in Latin America.