[cellular news] The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, said today that it is providing political risk insurance to support the expansion of MTN Afghanistan's (MTNA) operations.
In 2007, MIGA provided US$74.5 million in coverage for the start-up of MTN's operations in the country. The additional coverage of US$82.1 million, issued this month by MIGA to parent company Mtn Dubai (MTND), will protect its equity investment and shareholder loan against the risks of transfer restriction and expropriation for a period of 10 years.
MTN Afghanistan's investment will focus on improving its mobile telecommunications infrastructure, increasing geographical coverage, and enhancing the quality of its mobile services in Afghanistan.
With four operators in the country, the country's mobile network has increased by seven-fold in the past five years, with a penetration rate of 47 per 100 inhabitants. The total number of mobile subscribers in Afghanistan is expected to grow to over 18 million by 2014. MTN has played a particularly significant role in expanding coverage in remote areas of the country, and provides mobile telecommunication services to 31 of the country's 34 provinces.
"Foreign direct investment plays a critical role in rebuilding war-torn economies, but perceptions of political risk can understandably deter potential investors," says MIGA's Executive Vice President Izumi Kobayashi. "This investment has already delivered on many fronts. It provides a strong pillar for economic growth and performs well financially, which demonstrates that business can thrive in challenging environments with appropriate risk mitigation. We are pleased to continue to support this important investment for the people of Afghanistan."
MTN Gets Political Risk Insurance for Afghanistan Subsidiary