PRE-PRIVATISATION CONVERTIBLE LOAN TO TELEKOM SRPSKE

Location:

Bosnia and Herzegovina

Project number:

26590

Business sector:

Information and Communication Technologies

Notice type:

Public

Environmental category:

B

Approval date:

17 Sep 2002

Status:

Completed

PSD disclosed:

26 Apr 2002

Project Description

Proposed convertible loan of EUR 30 million to Telecom Srpske, the state-owned incumbent operator in Republic of Srpska. The loan would be used to extend both fixed and mobile networks before privatisation.
Project objectives: To provide long term financing to the company during this pre-privatisation transition period and ensure that the privatisation process will be conducted openly and transparently in accordance with standard international practices. The Bank’s involvement will accelerate the introduction of commercial management principles within the national operator, foster liberalisation with the participation of international investors and introduce new telecommunications services.
 

Transition Impact

The transition impact of this project comes from the objective to privatise the state-owned telecoms company in the Republic of Sprska. The new project represents a continuity of the progress already achieved in restructuring the Bosnian telecoms sector. The process includes a previous sovereign-guaranteed telecommunications emergency reconstruction project and technical co-operation focused on the development of transparent legal and regulatory frameworks to support the integration and operation of the telecoms sector and to encourage private investment.

The Client

Telecom Srpske, the majority state-owned incumbent telecoms operator in the Republic of Srpska. The company has licenses to operate fixed and mobile networks nation wide.

EBRD Finance

EUR 30 million senior convertible loan

Project Cost

The company estimates the costs of the project at EUR 95 million to be invested during 2002-2003.

Environmental Impact

The project was screened B/0, requiring an environmental analysis of the proposed development.
 
The analysis examined the environmental issues associated with construction and operations, public participation, nature protection, use and disposal of hazardous materials and obsolete equipment.
 
There are unlikely to be any significant environmental issues associated with the project. Telecom Srpske has all necessary permits for their current operation in place. All other permits required for the expansion of their operation will be obtained as the project progresses. The analysis also confirmed that construction plans, including siting and disposal of potentially hazardous materials, worker health and safety, will be undertaken in accordance with relevant EU, national and local legal requirements. Telecom Srpske provides regular training to its employees on health and safety.

Technical Cooperation

Previous technical co-operation financed by donor funds provided by Japan, UK and Germany, focused on the development of a transparent regulatory framework, including assistance in preparing the Telecommunications Sector Policy, Telecommunications Law and adoption of Tariff Policies. The project will benefit from the progress achieved in developing the telecoms regulatory environment in Bosnia & Herzegovina. In addition there was a substantial contribution from the BOS-IT fund (Italy) that allowed further upgrading of the Company's network. The Project will benefit from the progress achieved in developing telecoms regulatory environment in Bosnia Herzegovina and network upgrading financed by the donor funds.
 

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