afrol News: GSM cellular telephone network in Cameroon financed


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GSM cellular telephone network in Cameroon financed

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afrol News, 13 February - This week, the International Finance Corporation and PROPARCO, a subsidiary of the French development agency Agence Française de Développement, finalized an innovative project financing the development of a GSM cellular network in Cameroon. 

The Société Camerounaise de Mobiles (SCM), a Cameroonian cellular company, has been chosen to develop and operate a nationwide GSM cellular telephone network in the country. "The development of such a modern, efficient, and affordable infrastructure is an essential tool in fighting poverty and in supporting a process of sustainable development," said Marc Gilbert, PROPARCO's Representative in Douala. 

- SCM's telecom infrastructure contributes to improving links with remote areas, increasing competitiveness through better and cheaper access to information, and attracting foreign investors, he added.

IFC and PROPARCO are jointly providing a credit enhancement facility - comprising partial guarantees and a stand-by facility - for a FCFA 29 billion (about US$ 41 million equivalent). The credit enhancement was supplemented by subordinated loans from PROPARCO and IFC for a total of Euro 5 million.

This is one of the first credit enhancements of a local currency loan for a major infrastructure project in Africa. Structured to maximize the use of local currency financing, it encourages local and regional banks to participate in long-term project financing for an infrastructure project. It also has the benefit of increasing the amount of local currency loans and extending their maturity.

SCM is one of two private cellular companies operating in Cameroon and has a 15-year license granted in 1999 by the government of Cameroon. Since operations began in January 2000, SCM has out-performed its original estimates and is leading the market with 226,000 subscribers. Its presence has introduced competition in the telecom market resulting in strong growth and substantial price reductions. 

Along with the introduction of new services, this has helped to significantly improve access to telecom services. With SCM's arrival, overall telephone penetration (mobile and fixed) grew from approximately 100,000 at year-end 1999 to an estimated nearly 450,000 today. 

- SCM is an example of the pivotal role that the private sector can play in developing the information infrastructure of Africa, an essential pre-requisite for integrating with the increasingly information-based global economy, said Mohsen Khalil, Director of the joint World Bank-IFC department for Global Information and Communication Technologies. "By using a new instrument to promote local currency financing for the first time in Africa, IFC is helping to upgrade the country's infrastructure and make urgently needed communications infrastructure more affordable to a large part of the population."

The World Bank Group's Global Information & Communication Technologies Department (GICT) contributes to developing and promoting access to information and communications technologies (ICT) in the emerging markets. It aims at providing both governments and private companies with the capital and expertise needed to develop and exploit ICT to reduce poverty and foster development.


Sources: Based on World Bank and afrol archives


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