Finnfund, a Finnish development financier, announced $19 million loan to telecom operator Zain Iraq.

The financing allows Zain Iraq to modernize its network in Northern Iraq as well as enhancement to the capacity and quality of its existing 3G network in other parts of the country.

This is Finnfund’s first investment in Iraq. The loan is part of a debt package which is syndicated by IFC, a member of the World Bank group.

“Rebuilding Iraq will require private investments in basic infrastructure and services to the tune of $100 billion. Finnfund is proud to contribute to re-connecting Iraqis to each other and the world through mobile networks,” said Finnfund CEO Jaakko Kangasniemi.

“This financing from IFC and partners will help us strengthen our footprint, modernize infrastructure and provide a better quality of service to our customers,” said Ali Al-Zahid, CEO of Zain Iraq.

Currently, 25 percent of the population in Iraq is using 3G network, and 11 percent of adult population has an access to financial services.

Zain Iraq is one of the leading mobile operators in the country and has over 14.6 million customers. Currently, the company employs over 2000 people in Iraq, of which 27 percent are women.

IFC funding

IFC, a member of the World Bank Group, is providing a financing package of $269 million to Zain Iraq.

IFC arranged a $269 million debt package including $100 million from IFC’s own account, and $169 million in mobilization.

The financing will help Zain Iraq enhance the capacity and quality of its 3G network and expand coverage to unserved areas, as well as helping the company modernize its networks and customer service in northern Iraq.

Iraq is one of the least developed telecom markets in the Middle East region due to the fragile security situation, and mobile network operators have struggled to maintain their networks and have refrained from investing heavily in infrastructure.

“By arranging and mobilizing a 7-year loan in a country where long-term financing options remain limited, IFC’s investment will support Zain Iraq’s growth plans,” Mouayed Makhlouf, IFC Regional Director for the Middle East and North Africa, said.

Since 2011, IFC arranged a $400 million syndicated loan for Zain Iraq. This included mobilization of $195 million from DEG, Proparco, FMO, and the Infrastructure Credit Facility.