The European Investment Bank (EIB) is providing EUR 68.5 million to Telefónica Celular del Paraguay SA (Telecel) to part-finance the expansion of its GSM network structure. The remaining funds are being provided by commercial banks and Telecel’s own resources.
Telecel belongs to the European group Millicom, with extensive experience in the telecoms market and access to centralised technical and commercial support structures. Telecel has been present in the Paraguay telecom market since 1992, when it launched mobile services based on analogue technology. The company decided in 2004 to migrate to GSM technology to accelerate subscriber growth and to enhance Telecel’s competitive position in the mobile market. This investment project will allow coverage of all cities with more than 5 000 inhabitants and further increase the population coverage to about 83%; this is particularly important in a country with a very low fixed-line density (eight mobile phones for one fixed line). The investment project will be completed in 2009.
The project will bring big economic benefits to the country, as efficient communication plays a key role in enabling the development of commercial activities.
The EIB is extending this loan in the context of the current lending mandate for Asia and Latin America (ALA IV). This will be the first EIB operation in Paraguay.
Background:
The European Investment Bank is the EU’s long-term financing institution promoting European objectives. Set up in 1958, the EIB operates in the 27 EU Member States and more than 130 other countries in Asia and Latin America, Central and Eastern Europe, the Balkans, the Mediterranean region, Africa, the Caribbean and the Pacific. Lending operations outside the EU are part of the EU’s policy of cooperation with non-member countries.
Since 1993 the Bank has carried out four successive lending mandates for Asia and Latin America. Under the current mandate, covering the period 2007-2013, the EIB is authorised to lend up to EUR 3.8 billion for financing operations that help to support the EU presence in the regions in question through foreign direct investment, transfer of technology and know-how. The EUR 3.8 billion regional ceiling is broken down into indicative sub-ceilings of EUR 2.8 billion for Latin America and EUR 1 billion for Asia.