September, 2007Skopje, Macedonia

International Finance Corporation (IFC)

Global Information & Communication Technologies Practice

IFC’s fundamental role is to promote economic development by encouraging private investment, both foreign and domestic, in developing member countries

IFC participates in private ventures that benefit the host country economy, promote high environmental standards, and provide strong demonstration effect

World Bank Group

International FinanceCorporation (IFC)

Multilateral Investment Guarantee

Agency (MIGA)

International Development

Association (IDA)

International Bank for Reconstruction and

Development (IBRD)

Promote sustainable private sector investment in emerging markets

International Finance Corporation

• AAA rated member of the World Bank Group which is owned by 179 countries

• Major source of IFC’s borrowings is the international markets, $1.8 bn in FY06

• FY06 commitments: $6.7 bn in 284 projects • Authorized capital: $2.5 bn• FY06 Net Worth: $11.1 bn• FY06 Net income: $1.3 bn

Between 1956 and 2006, approximately $56 bn of own funds invested in 3,531 companies in 140 developing countries -

Additional $25 bn mobilized from other investors

Global1%

Sub-Saharan Africa

9%

Europe & Central Asia

31%

Latin America29%

Middle East & N.Africa

7%

East & South Asia23%

$21.6 bn committed portfolio at end of FY 2006$21.6 bn committed portfolio at end of FY 2006

Notes: Data as of July 2005

International Finance Corporation

• Albania• Azerbaijan• Bosnia and Herzegovina• Bulgaria• Croatia• Kazakhstan• Kyrgyz Republic• Macedonia• Moldova• Montenegro• Romania• Serbia• Tajikistan• Turkey• Turkmenistan• Uzbekistan

IFC’s Southern Europe & Central Asia (SECA) Region

IFC’s annual investments in the SECA region have reached a billion USD in FY 2007:

Investments in SECA in USD million:

Turkey is IFC’s 5th largest country exposure with a $1.27 bn portfolio as of August 31, 2007

The Hub Office for the SECA region is located in Istanbul, Turkey, with representative offices in other countries

Southern Europe & Central Asia Region

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007587 842 811 997 1,029

IFC in Information & Communication Technologies

IFC is the largest multilateral financier of Information and Communication Technologies projects in emerging markets.

• First telecoms investment in 1969.

• Nearly US$5.1 billion in financing commitments for 125 investments in 45 countries by the end of FY 2006

• Current outstanding portfolio in ICT totals US$1.4 billion.

• Close relationships with many key players in the industry (regulators, operators and equipment suppliers).

• One of the best-performing sectors within the World Bank Group, both in terms of financial returns and development impact

Distribution of IFC’s Actual ICT Portfolio

By Regions

East Asia12%

South Asia7%

Eastern Europe

11%

SECA16%

LAC33%

MENA11%

Africa9%

Global1%

Fixed telephony

28%

Mobile telephony

50%

Media & Satellite

2%Cable &

Broadband14%

IT6%

By Segments

IFC’s Products and Services

IFC’s Products

Industry knowledge &

contacts

Sensitivity toGovernment

priorities

Commercial &technical skills inemerging markets

Capital Mobilization• Commercial bank lending -

exempt from withholding tax & provisioning requirements

Capital Mobilization• Commercial bank lending -

exempt from withholding tax & provisioning requirements

Long Term Financing• Corporate / project financing

• Equity / Quasi-equity

Long Term Financing• Corporate / project financing

• Equity / Quasi-equity

Advisory Services• Country, industry, financial

and technical advise

Advisory Services• Country, industry, financial

and technical advise

GICT: A Value Added Partner

• Global perspective on ICT Advice based on intimate understanding of global technology trends & best practices Global presence & network permits borderless engagement Leading emerging market investor in the telecom and IT industry

• Long-term financing partner Invest across company lifecycle – early, mid and late stage Array of financial products – equity, quasi-equity, debt, guarantees, cross border

financing Funds mobilization through international network of financial institutions & capital

markets

• Extensive World Bank & IFC network Established presence in over 75 emerging market countries Long-standing relationships with governments & companies across member countries

• World Bank & IFC credibility & stature Track record in emerging & frontier markets reassures foreign investors & host

countries Recognized emerging market leader in corporate governance & sustainable

development

Investment Philosophy • Telecom / Media:

– Private sector management & majority ownership– Some sponsor requirements (transparency, reputation)

• IT: – “Stage independent investor” – early, mid & late stage– Various instruments - Common & Preferred Equity, Quasi

equity, e.g. Convertible Loans, Loans with Warrants, Mezzanine financing

– Minority equity positions: 5% to 20%– Board participation (observer role only)– Investment focus: IT Services, IT Enabled Services,

Software Development, e-Commerce, e-Government– Provides introductions to strategic partners– Follow-on financings available

IFC’s Investment Criteria

• Similar to commercial banking requirements, plus:

– Global Emerging Markets focus

– Private sector management and majority ownership

– Selectivity of sponsors, especially regarding transparency and reputation

– Investment limited to 25% of total project cost (50% for expansions), but no more than 25% of total capitalization of the company.

– Demonstrable development impact:

o Positive economic return.

o Social and environmental impacts mitigated.

• Typical deal size:

- Telecom / Media: US$15-100 million

- Information Technology: US$ 2-20 + million

ICT Projects of IFC in Southern & Eastern Europe

• Turkey - Meteksan (IT): US$8.5 million term loan to Meteksan to refinance short-term debt and support expansion plans and working capital requirements

• Russia - IBS (IT): US$8 million convertible loan to IBS to support financial restructuring and expansion plans

• Romania – Orange (Mobile): US$215 million syndicated term loan to Orange Romania

• Moldova – Voxtel (Mobile): US$35 million syndicated term loan and Equity to France Telecom’s subsidiary in Moldova

• Albania – Vodafone (Mobile): US$41.5 million term loan to Vodafone Albania

• Macedonia - Maktel (Fixed and Mobile): US$30 million syndicated term loan and equity investment to Matav’s subsidiary

• Hungary – Matav (Fixed and mobile): US$100 million pre- and post privatization term loan and equity investment

• Russia – Sonic Duo (Mobile): US$30 million syndicated term loan and mezzanine investment

INDIA

Indecomm US$ 2,600,000 Equity

Co-Investor Early Stage Financing

INDIA

Spryance US$ 2,000,000 Equity

Lead Investor Start-Up Financing

INDONESIA

PT Sigma US$ 3,000,000 Equity

Co-Investor Expansion Capital

PAKISTAN

TRG Pakistan US$ 7,500,000 Equity

Lead Investor Expansion Capital

THE PHILIPPINES

Software Ventures International US$ 2,000,000 Equity

Lead Investor Expansion Capital

GLOBAL

Novica US$ 3,000,000 Equity

Investor Early Stage Financing

RUSSIA

ru-Net Holdings US$ 5,000,000 Senior Debt & Quasi-Equity

I nvestor Expansion Capital

RUSSIA

Egar Technology US$ 1,500,000 Equity

Lead Investor Expansion Capital

EGYPT

IT Worx US$ 2,500,000 Equity

Lead Investor Expansion Capital

CHINA

GDS China US$ 5,000,000 Equity

Investor Expansion Capital

WORLD

MPN US$ 1,300,000 Equity

Investor Expansion Capital

INDIA

FINO US$ 5,000,000 Equity & Quasi-Equity

Founding Investor Start-up Capital

Internal to IFC

Supervision

As Seen By Client

Management Approval

Board Approval

Initial Discussions

Mandate LetterAppraisal

Financing Negotiations

Info. Memo & SyndicationLegal Documentation

Disbursement

Initial Review & Authorization to Appraise

20

IFC’s Investment Process

Let’s Discuss Further – We are there to Work with You

Marko CuravićInvestment Officer

Southern Europe & Central Asia Region

Istanbul OfficeTel: +90 212 385 3000Fax: +90 212 385 3001

Email: MCuravic@ifc.orgWeb: http://www.ifc.org

ANNEX: Examples of IFC’s Transactions

Russia: IBS (Information Business Systems)

• In 2002, IFC provided US$8 million convertible loan to IBS to support financial restructuring and expansion plans

• IBS is largest IT group in Russia Operates largest offshore software development company in Russia under brand

Luxoft

Largest IT distributor & systems integrator in Russia

Developing own computer brand and direct distribution model in Russia

• IFC’s investment : Increased availability of IT products & services in market

Offered innovative convertible debt structure with longer tenor than available in market

Advised IBS in building executive team & benchmarking performance v. global IT service leaders in India and elsewhere

IBS has grown more than 4x since investment

IBS has become the leading employer of high end IT professionals in Russia

Sent positive message to investors about attractive opportunities Russia’s IT sector

IBS has become a vocal leader advocating regulatory reform in Russia

GICT Flagship Transactions

India: DQ Entertainment

• In 2003, IFC invested $3 million in DQ Entertainment, leading animation services company

Provides outsourced & proprietary 2D/3D animation & multimedia services Clients include Disney, Warner Brothers, Universal, Il Grupo Alcuni

• IFC’s investment & presence : Helped take DQ Entertainment’s operations to next level through addition of

latest CGI/3D animation facilities Early mover and catalyst for India’s animation industry, which requires highly

skilled & creative professionals Part of IFC’s strategy to help innovative Indian companies expand into global

markets, creating export earnings & employment Assisted DQ in raising next round of financing within 12 months at substantial

premium

GICT Flagship Transactions

Russia: TV3

• In April 2004, IFC invested $7.0 million in parent company of TV3 Russia

Existing shareholders provided $5.0 million

TV3 will expand distribution capabilities & broadcast infrastructure

Plans to enhance program offering with wider range of family-oriented entertainment content

TV3 Russia - rapidly growing independent terrestrial television broadcaster reaching nearly 45 million people

• IFC’s involvement contributes to: Development of independent private media in Russia

Stimulates business growth in advertising & broadcasting industries

Supports development of Russia’s telecom sector

GICT Flagship Transactions