Pakistan EDGE boosted by US$500m loan to Warid for Ericsson expansion

Pakistan is to witness a major expansion of its 3G capacity as the result of a contract signed by Ericsson and Warid Telecom.

Warid Telecom are one of the most important mobile operators in the country. What is intended is an EDGE-compliant network financed to the tune of US$500 million. Several sources of finance will be needed to achieve the expansion. The loan, a buyer credit arrangement, will be backed primarily by Sweden's Exportkreditnämnden (EKN, The Swedish Exports Guarantee Board). Other players are joint lead arrangers ABN Amro Bank NV (facility agent) and Standard Chartered Bank (inter-creditor agent).

Those involved with the arrangement are keen to stress that several records have been broken in the contract:

  • Pakistan's highest sum employed to finance telecom debt from outside the country;
  • largest sum backed up by an export credit agency for eight years; and
  • EKN's largest financing of a telecoms project anywhere in the Middle East and Asia in addition to Pakistan.

Warid will use the loan to finance Ericsson's equipment in the project, an arrangement which has existed for some time; Ericsson has become Warid's major equipment supplier. Warid in turn is the largest foreign investment group in Pakistan. The company is confident that the new contract will enable it to exploit Pakistan's considerable customer growth and market potential.

The loan will apply for the rest of this year and 2007. Its disbursement relies on several approvals including the State Bank of Pakistan. Signing of the contract took place in Abu Dhabi.

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