Kazaktelecom Debt (KTC)

complete

A senior secured debt facility for OAO Kazakhtelecom (KTC), the national telecommunications operator in Kazakhstan. The financing will be used for institutional strengthening, further development of the modernisation plan of KTC and facilitating the privatisation to a strategic investor. The project aims to: The project will directly influence essential market reform in the Kazakh telecommunications sector, strengthen corporate governance and support KTC by improving and expanding the telecoms infrastructure in Kazakhstan, speeding up and completing the currently ill-structured privatisation process. The project will also strengthen the image of KTC by promoting market change in one of the largest domestic companies. This will become a telecoms landmark transaction in Central Asia. KTC is one of the largest companies in Kazakhstan and the principal provider of telecommunications services in the country, including local, long distance, international, mobile telephony, data transmission, private leased lines, Internet, paging, radio and television broadcasting, and directory and emergency services. The company has installed 2.2 million lines of switching capacity and, as of the end of June 1999, operated 1.6 million subscriber lines. The EBRD will provide senior secured debt financing up to US$ 50 million (EUR 47.2 million) to KTC, which will finance a specific capital expenditure programme. KTC’s total capital expenditure programme between 1999-2001 is US$ 158.3 million (EUR 149.4 million). The project has been classified as B/0. The analysis examined the environmental issues associated with construction and operations, public participation, nature protection, use and disposal of hazardous materials and obsolete equipment. KTC has all necessary permits required for the operation of the project. The Bank’s Legal Transition Team is currently working on a technical cooperation (TC) project with the Government of Kazakhstan to further develop the telecoms regulatory and legal framework and the telecoms sector development policy. The Bank might consider future TC funding to make telecoms experts available to the company through their participation in the Board and the Board or Directors of KTC.