MTS LOAN

Location:

Regional

Project number:

35648

Business sector:

Information and Communication Technologies

Notice type:

Private

Environmental category:

C

Target board date:

07 Dec 2004

Status:

Completed

PSD disclosed:

04 Nov 2004

Project Description

Mobile TeleSystems OJSC (the Borrower or Company), one of the leading mobile operators in the Russian Federation, is contemplating long-term financing from the EBRD in order to finance:
(i) capital expenditure
(ii) local works
(iii) acquisitions in the regions of the Russian Federation.

Transition Impact

Through this transaction, the Bank will be supporting the geographical expansion of MTS into the underserved regions of the Russian Federation and supporting competition in these areas. The proposed project will promote competition which in turn will lead to introduction of new services and more importantly, through the reduction of prices, it will bring the mobile telephony within the reach of a wider segment of the population in the regions, thus promoting commercial activity in these economically less developed areas.

The Client

Mobile TeleSystems OJSC (MTS or the Company) is the largest mobile phone operator in Russia and the CIS. It provides services to over 27.8 million subscribers in Russia, Ukraine and Uzbekistan. The Company is quoted on the NYSE and is rated BB- (stable) by S&P and Ва3 (stable) by Moody’s.
Principal shareholders are Sistema (50.4%), and T-Mobile (25.1%). The free float is at 22.5%. 
 

EBRD Finance

The Bank will provide a US$ 150 million loan with a maturity of up to seven years.

Project Cost

MTS expects its capex spending in 2005 to exceed US$ 1.4 billion.

Environmental Impact

The project was screened C1. 
There are unlikely to be significant environmental issues associated with this project.  Environmental due diligence is currently underway initially using the Bank’s Environmental Questionnaire for Telecommunication Projects.  Environmental issues are likely to be associated with construction and installation works for transmissions, towers and other equipments, right-of-way, general health and safety issues and new acquisition.  The Company will be required to ensure that the project will comply with national and EU environmental, health and safety standards and regulations as well as to submit annual reports on environment, health and safety.

Technical Cooperation

None.

Company Contact

Andrey Braginski, Director of Public and Investor Relations:
Telephone: +7 (095) 911-65-53
Fax: +7 (095) 911-65-88
E-mail: ir@mts.ru
 
 

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

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

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.