IFC grants loan to Telefónica to boost the development of telecommunications in Ecuador

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The FINANCIAL — The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has granted a loan of US$75 million to Otecel S.A., (a subsidiary of Telefónica SA in Ecuador). This loan will enable the company to, among other things, make the second of three payments to the Ecuadorean state for the 4G LTE spectrum assigned in 2015. 

The loan from IFC will help Otecel expand its mobile broadband services in Ecuador, including in regions that traditionally have had little access to such services. This loan is the most recent example of the commitment by IFC and Telefónica to the sustainable development of Ecuador. The additional spectrum will allow Otecel to continue expanding its services in the country, which helps promote the sustainable development of the economy.  The last payment for the spectrum will be made toward the end of 2016, according to IFC.

“Otecel thanks IFC for the confidence that it has shown and which allows it to meet its obligations to the state with respect to the 4G LTE spectrum concession,” said José Manuel Casas, CEO of Telefónica Ecuador.  “This level of support from IFC is evidence of the the transparency, effective management, commitment, and quality of service that Telefónica offers to its 5 million customers in the country and to the more than 315 million clients across the world.  We are proud that our 4G LTE network is now the largest in Ecuador, as our commitment is to deliver technology and the possibility that it brings to more and more people,” noted Casas. 

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“This new investment by IFC is part of our commitment to the sustainable development of Ecuador and is intended to boost a sector that is fundamental for the country’s economy,” stated Carlos Leiria Pinto, head of IFC for the Andean Region. “For IFC, supporting the development of the telecommunications sector is vital for promoting growth in emerging economies.  A number of studies have demonstrated that a 10 percent increase in broadband coverage can lead to an increase of 1.5 percent in a country’s gross domestic product,”” said Guillermo Mulville, who heads the IFC’s telecom team for Latin America and the Caribbean. 

IFC’s strategy in Ecuador is centered around the supply of financing and technical assistance to companies that have a strong positive impact on the sustainable growth of the economy.  This strategy also seeks to support projects in the area of climate change, or which generate jobs and benefit marginalized sectors of the population.  IFC support programs in Ecuador began when the country became a member of the institution in 1956.  Since then, IFC investments in the country have amounted to approximately US$540 million. 

 

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