A person holds a mobile phone. File photo AFP | Mohd Fyrol
ERBIL, Kurdistan Region – The International Finance Corporation (IFC), sister company of the World Bank, announced plans to invest $269 million in Zain Iraq to improve telecommunications and stimulate economic growth.
"This financing from IFC and partners will help us strengthen our footprint, modernize infrastructure, and provide a better quality of service to our customers," Ali Al-Zahid, CEO of Zain Iraq said in statement released by the World Bank Group on Tuesday.
"It will also enhance access to higher quality broadband, a key enabler of broad economic activity, for both consumers and businesses," Al-Zahid added.
IFC produced a debt package which included $100 million from its own account and another $169 million in mobilized loans from the Arab Bank and other lending partners such as DEG and Finnfund.
With IFC's contribution to Zain Iraq, a leading mobile network in the region, the company will be able to enhance the quality and capacity of its network, expand coverage areas across Iraq as well as modernize networks in the Kurdistan Region.
The investment will support Zain Iraq's grown plan over a seven year period, as long-term financing options in the war-torn country are limited and volatile.
Years of conflict and instability in the region has caused Iraq to become one of the least developed telecommunications markets in the Middle East resulting in telecom companies abstaining from investing in much needed infrastructure to carry out operations.
IFC also hopes to send a message to other players domestically and internationally that investing in infrastructure is imperative to the reconstruction process following three years of occupation under ISIS and military efforts to rid the country of the terror group.
"Supporting infrastructure development in Iraq is an essential building block of the reconstruction effort," said Mouayed Makhlouf, IFC Regional Director for the Middle East and North Africa.
He added that restoring and enhancing telecommunications infrastructure can have a "substantial multiplier effect on the economy through increased connectivity and reduced transaction costs, enhanced flows of information, and more efficient and effective matching of market players, among many other much needed benefits."
IFC is the largest global institution focused exclusively on improving the private sector in developing countries. Zain Iraq has been a partner of IFC since 2011.