In June the International Finance Corporation (IFC) announced that it is providing a finance package worth US$269 million to bolster the Iraqi telecoms sector. The World Bank subsidiary offers investment, advisory and asset-management services to encourage private-sector development in developing countries.
The finance package will go to Zain Iraq, one of the three mobile network operators that hold national licences, along with Asiacell and Korek Telecom. The package includes US$100 million from IFC’s own account and US$169 million in mobilised loans from the Jordan-based Arab Bank and other lending partners such as Finnfund and DEG. It will be used to upgrade the network and enhance the capacity and quality of 3G coverage. It will also extend coverage to areas not yet served.
Zain Iraq CEO Ali al-Zahid commented, ‘This financing from IFC and partners will help us strengthen our footprint, modernise infrastructure, and provide a better quality of service to our customers … It will also enhance access to higher-quality broadband, a key enabler of broad economic activity for both consumers and business.’
Iraq telecoms systems are one of the least developed in the world, with infrastructure damaged by years of conflict. Those areas caught up in the conflict with Islamic State have very limited mobile infrastructure left, with residents forced to rely on satellite technology for communications.
The sector has also suffered as a result of political instability and decreased consumer spending arising from the economic crisis. All this has served as a barrier to business and hampered development of the sector.
This finance package is hugely important, especially during a period of political uncertainty. More importantly, it will send a positive signal that Iraq is open for business and reconstruction.