Financing part of RomTelecom's capital expenditure programme for 1998 and 1999.
The project aims to:
- facilitate the privatisation of RomTelecom; and
- maximise the benefits for RomTelecom's future development through financing part of its capital expenditure programme for 1998 and 1999.
Loan proceeds will be used for partial financing of:
- a second international exchange;
- transmission equipment;
- ISDN and signalling system 7;
- call collection system;
- network management;
- customer local access equipment; and
- local switching.
The project will support the privatisation and liberalisation of the telecommunications sector and will facilitate foreign capital inflow to Romania. An independent regulator will be established to ensure a transparent, equitable regime for all operators. A predictable tariff regulation will be implemented and the tariff-rebalancing will be accelerated. Business and residential subscribers will benefit from increased teledensity and the improved network quality and efficiency.
The borrower is RomTelecom S.A., the public telecommunications operator in Romania with a telephone network of 3.5 million lines. The company has been corporatised into a joint-stock corporation initially 100 per cent state-owned. This is to be privatised through the sale of at least a 30 per cent share to a strategic investor.
Unsecured loan of US$ 100 million (ECU 87.7 million).
US$ 706 million (ECU 620 million).
There are unlikely to be any significant environmental issues, but due to the potential environmental impact in connection with the location decisions and construction activities, an Environmental Analysis will be carried out by the project sponsor. Public participation issues will also be addressed and the project sponsor will need to provide written assurance that persons or companies affected by the construction of new buildings, antennae or the routing of new cables have been notified of the project and that the borrower has taken their comments into consideration during routing selection and prior to construction.
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