Landmark IFC Project Helps Deliver Internet to 10 Million People in Emerging Markets
Washington, D.C., September 22, 2016 — IFC, a member of World Bank Group, announced today that it has successfully completed a landmark six-year project with satellite operator O3b Networks Ltd that has resulted in the delivery of affordable broadband access to more than 10 million people in 31 developing countries.
At a time when the project was deemed too risky by many commercial leading banks, IFC in 2010 committed to help O3b Networks build, launch, and operate a medium-earth orbit satellite constellation that would provide affordable broadband connectivity to landlocked and remote developing countries. IFC helped the company close an investment gap by making a $10 million senior loan, providing $60 million in mezzanine financing for its own account, and enabling an additional $170 million in parallel loans by other institutions.
“Broadband internet access is vital to a country’s competitiveness and economic development,” said Atul Mehta, IFC Director of telecommunications, media, technology, venture capital, and private equity funds. “New satellite technology can bring affordable broadband to places where it is needed most, supporting all economic sectors and providing people and businesses with access to key services such as e-government, e-commerce, remote medicine, and online education.”
In Africa, broadband is often over 200 times more expensive than in the United States. Research shows that a 10 percentage point increase in fixed broadband penetration could increase GDP growth by 1.38 percent in developing countries. O3b Networks’ satellites provide high-speed internet to underserved regions of the world at a much lower cost compared to traditional geostationary satellites. To date, O3b has placed 12 satellites in orbit.
Key beneficiaries of the network are landlocked, sparsely populated and small-island countries that previously had no or poor broadband access. Countries that have already benefited from services include Timor-Leste, Papua New Guinea, South Sudan, Somalia, Peru, Samoa, Palau, Solomon Islands, Madagascar and the Democratic Republic of Congo, several of which are fragile and conflict-affected states.
In the Democratic Republic of Congo alone, over 4 million people and businesses benefit from this satellite-based broadband system today. The network is providing high-speed broadband service throughout the DRC via Raga Sat, one of the largest African internet service providers. In both urban hubs and rural villages, consumers, businesses, medical and educational facilities are now provided internet connectivity approaching that of major international cities around the world, closing a digital divide and spurring economic development.
IFC’s telecommunications, media, and technology group focuses on improving access to telecommunication infrastructure and services to expand the delivery of public and private services and promote innovation in industry and grassroots entrepreneurship. IFC’s long-term commitments in telecommunications and information technology totaled $673 million in the fiscal year ended in June 2016, including funds mobilized from other investors.
Source: Company Press Release