IFC Global Telecoms, Media and Technology

June 2012

IFC Overview• IFC is the member of the World Bank Group focused on the private sector

• Founded in 1956 with 182 member countries

• Largest multilateral source of loan/equity financing in Emerging Markets

• Over $97 Billion Invested Since 1956

• AAA-rated by S&P and Moody’s

• Equity, quasi-equity, loans, risk management and local currency products

• Takes market risk with no sovereign guarantees

• Promoter of environmental, social, and corporate governance standards

• Resources and know-how of a global development bank with the flexibility of a merchant bank

• Holds equity in over 722 companies worldwide across the following sectors:-Agriculture -Financial Markets-Manufacturing Service -Health & Education-Infrastructure -Oil, Gas and Mining

-Telecoms, Media & Technology

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IFC Investments Across All Sectors

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IFC FY2011 Highlights

Total Portfolio $42.8 billion

Committed in 2011 $12.2 billion

Mobilized(3rd parties)

$6.5 billion

# of Companies 1,737

# of Countries 127

Latin America

24%

East Asia and the Pacific14%

Europe & Central Asia

26%

Sub-Saharan Africa14%

Middle East & N.Africa

11%Global

1%South Asia

10%

The World Bank and IFC Work Together

World Bank TMT Policy Team

Works with Governments to facilitate:• Investment climate policies• Legal and regulatory policies • Media best practice guidelines• Selective PPPs

IFC TMT Team

Works with Private Companies to ensure:• Sound Economic fundamentals• Sufficient Financial Strength • Sensitivity to the Community• Profitable Investments

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Greenfield Projects to Corporate Expansions

IFC Financing in TMTTelecoms Media  Technology

Satelitte Infrastructure Data CentersSubmarine Cable Applications e/m Payments SystemsWireless/Cellular Content Information SecurityFiber Backbones Incubators IT Enabled Services

Broadband Hardware/DevicesManaged Services

Towers

Cross Cutting Venture Investments

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IFC Investments Across TMT

Commitments by Sub-Sector

IFC Highlights

Total Invested $6.5 billion

Committed in FY 2011 $337.2 million

Mobilized in FY 2011(3rd parties)

$562 million

# of Countries 69

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Supporting Development Through TMT Investments

• O3B- IFC led a group of development institutions in providing $260 million in financing to help O3b Networks Ltd complete a satellite system that will provide affordable broadband access to developing countries near the equator.

• Zain Iraq- IFC supported economic growth and expanded access to telecommunications services in Iraq through a landmark $400 million facility for Zain Iraq, the country’s largest mobile phone operator, providing telecoms to people of Iraq for the first time in history of the country.

• Vodafone Ghana – IFC led a group of development institutions and commercial banks in providing $215 million in financing to a mobile operator in Ghana. Through the project, IFC is supporting the successful privatization of the incumbent telecommunication company in Ghana, thereby helping to liberalize the market and promote the much needed competition that would help extend services to the bottom of the pyramid.

• IHS Towers- IFC provided $39 million in equity financing to a tower company in Nigeria. Through the project ,IFC helped the development of low-cost models for accelerating the extension of telecommunications services to previously underserved areas and for the roll out of affordable broadband wireless services.

IFC’s support of the telecoms, media and tech industry helps raise living standards for people throughout the developing world

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Award Winning Recognition from the Marketplace

Altobridge : World Economic Forum -2012 Technology Pioneer; WSJ -2011 Technology Innovation Award

Fino : 2011 Young Global Leader Award by World Economic Forum; 2011 Skoch Financial Inclusion Award; 2011 Sankalp Awards; 2011 CFO 100 Roll of Honor By CFO India magazine; 2010 Manthan South Asia Award for Best Project in the category e-Inclusion: Financial Inclusion at the Bottom of the Pyramid through use of Technology; 2010 Asia Insurance Review Awards: Technology Initiative of the Year; e-India 2010 Awards – recognizing excellence in ICT; 2009 Financial Times Sustainable Banking international award

Voxiva

2011 Department of Health and Human Services (HHS) Innovation Award; 2011 Public Relations Society of America Silver Anvil: text4baby; 2011 Fast Company Magazine: #40 Most Innovative Company in the world; 2011 #3 Most Innovative in Mobile and Healthcare; 2008 Technology in Government in Africa (TIGA) award; 2007 Legatum FORTUNE Technology Prize: Finalist and Technology in Government in Africa (TIGA) award

Yellow Pepper: Short-listed for the 2011 Achievement in Basic Needs Financing Category at Financial Times' and IFC Sustainable Banking Awards;2010 The Inter-American Development Bank (IDB) Utilizing new information and communication technologies - connect Banking award; 2010 "CP Capital Inflection Venture Prize" during the Americas Venture Capital Conference

Suvidhaa: 2011 Inclusive Business Leader Award; 2011 SKOCH Financial Inclusion Award; 2010 Skoch Virtual Corporation Award; 2010 Red Herring 100 Asia Award; 2009 ICAI Business Achiever award; 2008 Kutch Shakti National Award ; 2007 Girnar Award

O3B: 2010 African Infra deal of the year by Project Finance magazine Project Finance International

Avea: 2008 Trade Finance Magazine Deal of the Year

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Global Expertise

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How We Finance TMT Projects

•Total funding for own account cannot exceed 25% of total capitalization (debt plus equity)

•Umbrella for participants in IFC’s syndication program: IFC lender of record, immunity from taxation and provisioning requirements.

Investment Type IFC Investment

Greenfield, total costless than $50 million

Greenfield, total costmore than $50 million

Expansion or Rehabilitation

Ability to mobilize funding from Banks, DFIs and PE funds

Up to 35% of incremental investment

Up to 25% of incremental investment cost for IFC’s account

Up to 50% of incremental investment cost

Mobilization of 3rd financing

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• Subordinated loans• Income participating loans• Convertibles • Other hybrid instruments

Financial Products - Equity to Debt

• Private Equity (including Venture Capital)•• Typically 5-20% shareholding• Long-term investor, typically 4-8 year holding period• Not just financial investor, adding to shareholder value• Board position on case by case basis

Equity

• Subordinated loans• Income participating loans• Convertibles • Other hybrid instruments

Mezzanine/Quasi Equity

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Senior Debt & Equivalents• Senior Debt: Project Finance or Corporate Finance

• Fixed/floating rates, US$, Euro and some local currencies

• Commercial rates, repayment tailored to project/company needs

• Long maturities: up to 15 years, appropriate grace periods

• Range of security packages suited to project/country

• Islamic Financing alternatives available

• Mobilization of funds from other lenders and investors; 1. through IFC’s B loan Syndication Program loan arranger role, 2. arranging parallel financing from other banks and Development Finance Institutions

• Currency & Interest Rate Swaps

• Caps, Collars, and Currency Derivatives

• Commodity Derivatives

Risk Management

Financial Products - From Equity to Debt

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Mobilizing Financing - Syndication “B-Loan” Structure

• A loan is for IFC’s own account

• B loan is for account of participant foreign commercial banks

• Only one loan agreement, signed by the borrower and IFC

• IFC is the lender of record for the entire facility (A loan+B loan)

• Structure allows participants to benefit from IFC privileges andimmunities

• Better pricing/tenors than otherwise available; preferred creditor access to foreign exchange

• IFC Loans exempt from withholding taxes

Participants

IFC Borrower

Loan Agreement

A + B Loans

B LoanParticipationAgreement

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Mobilizing Financing – Parallel Loan/Agency Role

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• Parallel loan is for Lender’s own account

• Parallel loan funds and repayments flow through IFC

• Agency Agreement between borrower, IFC and parallel lendersfor administration of loans

• Common Terms Agreement harmonizes disbursements conditions, covenants EODs amongst lenders

• IFC and Parallel lenders retain own loan agreements directly with borrower

• One point of interface for borrower, simplification of communication, funds flows, general administration of loans

Parallel Lenders

IFC Borrower

Age

ncy

Common Terms Agmt (CTA)

A, B & Parallel Loan Funds

Facility Agent Agmt

Para

llel

Loan

Fu

nds

Agm

t Co

mm

on

Term

sA

gmt

CTA & Loan Agreements

IFC’s Investment Process

ConceptReview

• Client needs determined

• Assessment of project’s impacts and development contributions

• Policy Committee approval

• Mandate letter

NegotiationAppraisal/Due Diligence

• ID & initial assessment of business, technical, legal & enviro/social opps and risks

• Appraisal

• Complete analysis of opps and risks

• Negotiation and agreement of principal terms

IFC mgmt approval & Disclosure

• IFC mgmt approval

• Disclosure of environmental and social information

• Opportunity for public comment

Portfolio Management

Commitment and Disbursement

• Drafting & negotiation of legal documents

• Board approval

• Signing of legal documents

• Disbursement

• Annual & quarterly review of operational & financial performance

• Processing of waivers & amendments

• Board representation (if applicable) B-loan & parallel loan administration

We Agree on a Specific Timeline to Meet Client’s Needs

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We Agree on a Specific Timeline to Meet Client’s Needs

Project Investment:$70M (Senior $10/Mezz $60)

I.8% (penny warrants) shareholdingMobilization: $190M (Senior 105/Mezz $85)

Completed in 8 Months

May ‘11

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Sept - Oct ‘11

Credit ApprovalIFC Board Approval

April ‘11 November ‘11 Current

Appraisal Financial ClosureCommitment and

Mezzanine Disbursement

Concept ReviewMandate Letter

Monitoring

Time line depends on company’s support in providing information

Recent Investment in Telecoms and Media

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National Legal/Regulatory Policies

National Legal/Regulatory Policies

Recent Investments in the Technology Sector

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For More Information Regarding TMT Investments

Contact Us:

Tel: +1 (202) 458-2607

Email: TelMTech@ifc.org

www.ifc.org/tmt

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