Development Bank
Putting Successful Project Financing on the Right Path
In industrialized countries, the financing of formerly state-owned companies is usually realized through loans or initial public offerings. But in developing countries private investors are usually reluctant to act because the ICT network operators only have aging assets or cash flows encumbered with exchange rate risks to offer as security. In these cases, development banks often become involved and initiate project financing in cooperation with commercial banks.
Project companies which become the owners of a telecommunications network in need of modernization can be created on this basis. Both financial investors and technical partners with operational experience act as joint shareholders; Detecon, for example, is a technical partner who may act as a minority shareholder. Our consultants analyze the financing models applicable in these situations and assess the technical, commercial, and political risks. At the same time, they can initiate the sector reforms and deregulation measures necessary for the procurement of capital.
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