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EBRD Board approves first project for Kyrgyzstan
Kyrgyzstan is to receive its first loan from the European Bank for Reconstruction and Development (EBRD) to modernise its telecommunications infrastructure. The US$ 9.4 million (ECU 8.1 million) loan was approved yesterday by the Bank's Board of Directors.
Ron Freeman, First Vice President of the EBRD, said: "This project will enable this courageously reforming country to integrate swiftly into the fast changing world of commercialised telecommunications. The project also enhances linkages between various regions within mountainous Kyrgyzstan and thus helps integrate its national economy."
The borrower of the loan is Kyrgyz Telecom, a recently established state-owned enterprise responsible for the national telecommunications network of Krygyzstan. One of the main objectives of the project is to encourage the corporatisation of Kyrgyz Telecom to enable it to operate in the new commercial environment. As part of the project, and in addition to the loan, EBRD expects to provide grant technical cooperation funds of US$ 1.5 million (ECU 1.3 million) to develop the necessary organisational, financial and strategic planning skills within the company.
The project also aims to establish an effective regulatory and policy framework for the continued development of the telecommunications sector. The goal is to liberalise key market segments and ultimately attract private sector investment.
Proceeds of the Bank's loan will be used make priority investments to provide international access, and to upgrade transmission links between Bishkek, the capital, and other cities within Kyrgyzstan.
The project will be co-financed with the International Development Agency, which is expected to approve a parallel loan of US$ 18 million (ECU 15.5 million) later this month.
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