Zain Ghana gains $160 million funding
IFC provides funds for the expansion of Zain’s mobile network throughout Ghana
Zain Ghana has secured a $90 million loan and an additional $70 million in syndications arranged by the IFC, a member of the World Bank, to support its mobile network roll out.
Zain Ghana, which is majority-owned by Kuwait-based Zain Group, intends to use the funding to “scale up” its operations and expand services in rural areas, according to Philip Sowah, country manager, Zain Ghana.
“This investment will enable us to scale up our operations and provide superior mobile and fixed-line communications services to our customers,” Sowah said. “IFC has brought in a significant number of regional, long-term commercial investors, demonstrating a great vote of confidence for Ghana, particularly in the current economic crisis.”
He added that the company has already gained more than one million subscribers since launching operations in December 2008.
Stephanie von Friedeburg, IFC senior manager for global ICT, said the organisation was pleased to support Zain Ghana expand “affordable” services beyond the large cities such as Accra to remote and rural areas.
“This fits well with IFC’s objective to support the government in making available affordable telecommunications services to underserved populations, in order to enable economic growth, expand the delivery of public and private services, and promote regional integration,” she said.
After introducing measures to liberalise the telecommunications sector and promote competition, Ghana has experienced significant growth in the availability of telecommunications services, at lower costs to consumers. At 45%, the mobile penetration rate is higher than in other countries in Sub-Sahara Africa with a similar per capita income.
At the same time, teledensity in Ghana is highly concentrated in urban areas, leaving the penetration rates in rural and semi-urban areas well below 10%. The main barriers to increasing rural teledensity include high capital expenditure costs, lack of supporting infrastructure and a poor rural population.
The loan was provided by Cordiant Capital, the Emerging Africa Infrastructure Fund Limited, FirstRand Bank Ltd, and the Netherlands Development Finance Company, while IFC is acting as lender of record for the loan participants.