Millicom Ghana Secures Debt Financing for Network Expansion

The second-largest mobile telephone operator in Ghana, Millicom Ghana, is to receive a finance package of US$140 million. DEG – Deutsche Investitions- und Entwicklungsgesellschaft provides together with other development finance institutions, including French Proparco, a tranche of US$80 million. While DEG acts as coordinator of this tranche, it finances US$27.5 million of this amount itself. The remaining US$60 million will be provided by a pool of local banks.

Millicom Ghana will invest these funds in developing and strengthening its mobile phone network in Ghana.

Millicom Ghana was able to almost double subscribers to 1.2 million last year. Besides expanding the present network, the pending investments are earmarked for installing a fibre optic ring to enable the use of more internet based applications.

By financing this project in Ghana, DEG will contribute to upgrading the telecommunications sector, which currently accounts for six per cent of national aggregate value added. As a profitable company Millicom Ghana will continue to pay important taxes and customs duties contributing to the national budget. The sale of mobile phone cards will also generate additional employment opportunities in the whole country.

As one of the largest European development finance institutions, DEG has already implemented a whole range of telecommunications projects in Africa. Most recently at the end of June, it financed investments by the mobile telephony operator Celtel International in Madagascar, Malawi, Uganda and the Democratic Republic of Congo.

According to figures from the Mobile World, Millicom had just over 1.5 million customers at the end of September. The market leader is ScanCom, who ended the month with just under 3.9 million customers. The country population penetration level is around 27%.