Cel*Star applies for IDB funding
Stabroek News
April 16, 2004
TWT Guyana Limited, the owner of Cel*Star, is seeking up to US$18 million in loans from the Inter-American Development Bank (IDB) for its proposed US$48M investment in Guyana.
The IDB's Private Sector Co-ordination Committee has approved processing of the loan. According to the project abstract posted last week on the IDB's website, the US$48M project comprises a four-year investment programme for the design, development, construction and operation of a new mobile (GSM) wireless telecommunications service network in Guyana.
The abstract, dated December 16, 2003, says the company has already commenced its build-out and expects to start providing service this year.
"It will be the first significant wireless competitor to the incumbent monopoly, Guyana Telephone and Telegraph Company (GT&T) with whom it has a network interconnection agreement," the abstract says.
TWT has requested the IDB support in the form of two loans up to US$18M to support the project and will fund the other US$30M via equity and internally generated cash resources. The abstract says that the initial network will cover 86% of the population, with initial capacity for 40,000 subscribers and easily expandable.
But with the challenge to the ownership of Cel*Star now in the local courts, this is likely to delay the processing of the loan application.
The government in February 2001 granted a cellular radio telephone system license in the 900 MHz band to Cel Star Guyana. Director Wesley Kirton sold the company to TWT, a subsidiary of the Hon Group of Companies.
The IDB views the project as a major step to opening up the telecommunications sector in Guyana.
"The successful deployment of the company's business plan will contribute to Guyana's ongoing telecom market liberalisation process, which is being supported by the IDB and promote the growth and development of the overall telecommunications market and the Guyanese economy," the bank says.
The IDB is supporting the reform process and had been processing a US$18M loan for Guyana, which is now stalled until there is clear direction in the de-monopolisation talks with GT&T.