Kazaktelecom Debt (KTC)

Location:

Kazakhstan

Project number:

5898

Business sector:

Information and Communication Technologies

Notice type:

Private

Environmental category:

B

Target board date:

07 Sep 1999

Status:

Completed

PSD disclosed:

16 Aug 1999

Project Description

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:

  • contribute to the institutional strengthening of KTC through participation in corporate governance;
  • further develop the modernisation plan by financing a specific capital expenditure programme consisting of digital microwaves, billing systems, network expansion, and installation of additional payphones; and
  • facilitate the completion of the privatisation of KTC by preparing the company for the sale to a strategic investor.

Transition Impact

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.

The Client

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.

EBRD Finance

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.

Project Cost

KTC’s total capital expenditure programme between 1999-2001 is US$ 158.3 million (EUR 149.4 million).

Environmental Impact

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.

Technical Cooperation

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.

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

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Project Complaint Mechanism (PCM)

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Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.