Our investment
Description of the investment.
Description of the investment.
We are providing a $50 million loan to Pakistan Telecommunication Company Limited (PTCL), a leading digital infrastructure company in Pakistan, to support its planned acquisition of Telenor Pakistan, the a mobile network operator in Pakistan.
Impact information
Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.
Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.
What?
| Impact |
|---|
Increase and improve access to information and communication services, leading to better quality of life (SDG 9.C). Economic opportunity through increased firm productivity (SDG 8.2). |
|
|
How?
| Primary | Secondary |
|---|---|
|
Direct: Our capital will support the merger of two mobile network operator players to enable an increase in investments of critical digital infrastructure in Pakistan. This will ultimately lead to increased coverage, access, quality and sustainable prices in the market. |
Economic enabler: Increased coverage and better service quality creates indirect jobs and enhances firm productivity, supporting economic growth. |
Who?
| Stakeholder | Geography | Characteristics |
|---|---|---|
| Customers |
Pakistan |
Access/market penetration: Low unique mobile subscriber penetration rate of 39 per cent vs regional average of 58 per cent. Low mobile broadband penetration rate of 23 per cent vs a regional average of 48 per cent due to constrained access to connectivity and affordable devices. Low fixed broadband penetration rate of 9.7 per cent vs regional average of 14 per cent due to regulatory, coverage and affordability constraints. Penetration rates in Pakistan are equally below averages for lower-middle income countries. Coverage/quality: Only 76 per cent of the population is covered by a 4G network and 80 per cent is covered by 3G. There is limited technology innovation, investments in digital infrastructure, and growth due to a fragmented market with four mobile network operators. |
| Citizens, employees |
Pakistan |
Pakistan has a total population of approximately 231 million of which 63 per cent are rural-based and 64 per cent are youth under the age of 30. |
How much?
| Scale | Depth/Duration |
|---|---|
|
By 2030, we estimate that the merged entity would connect approximately 18 million new mobile subscribers; and 2.4 million fixed broadband subscribers including households and businesses. The merger will also enable a capital expenditure programme for digital infrastructure including: greater spectrum bandwidth, fibre etc. |
As the merger will increase rural network coverage and last mile access, we expect that impact will be deep for new subscribers that previously had no access to mobile and data services. These are likely low-income individuals residing in rural areas. Additionally, a larger spectrum bandwidth will provide improved quality of service and data speeds to adequately support faster 4G adoption and growth. At the market level, we expect that consolidation will increase competitiveness of the market for broadband which will accelerate the expansion of high-speed internet. |
Contribution/additionality
| Contribution/additionality |
|---|
|
Financial additionality: Commercial investors have limited appetite to provide a long-term US dollar denominated debt facility in Pakistan. |
Risk
Evidence RiskIt will be difficult to distinguish and attribute the market impact specific to this investment. Execution RiskThe merged entity does not make new investments in digital infrastructure and dampens competition by becoming the second largest operator with a leading position in both fibre and mobile. Unexpected Impact RiskIt will be difficult to distinguish and attribute the market impact specific to this investment. |
Impact score
|
Impact score (at point of investment)
The Impact Score is a tool to help us manage our performance against our strategic impact objectives. It is designed to incentivise investments that support our productive, sustainable, and inclusive objectives. You can find out more here. The Impact Score is published for investments made from 2022 onwards. The Impact Scores are calculated at the point of investment. We publish the Impact Scores of new investments annually, once the information has been externally assured by an independent third party. |
|---|
6 |
Environmental and social information
-
Environmental and social summary
A high-level description of the environmental and social aspects of the investment. This may include a summary of key environmental and social risks identified during environmental and social due diligence (ESDD); key elements of an environmental and social action plan (ESAP); or ways in which we plan to support the investee improve environmental and social standards, such as through their environmental and social management system (ESMS); as well as any other priority areas agreed with the investee.
-
Environmental and social risk
A risk category rating, which indicates the level of environmental and social risk associated with an investment. For an explanation of the categorisations used, see here. We consistently provide an environmental and social risk category for all investments screened from 2023 onwards.
Environmental and social summary
Working with other lenders, we have jointly agreed on a robust ESAP, to strengthen PTCL’s ESMS including bolstering their E&S capacity as they go through merger processes and proactive management of health and safety for contractors.
Environmental and social risk
Medium-High
Reporting and Complaints Mechanism
The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to reportsandcomplaints@bii.co.uk or by mail. See more details on our Reporting and Complaints Mechanism here.
For any other general enquiries contact us at enquiries@bii.co.uk
-
Key facts
- First published
:
When the investment was first published on the website database.
- June 2024
- Last updated
:
When the last quarterly update of the website database occurred.
- September 2024
- Project number
:
An identifier number shared by investments in the same project.
- D6769
- Status
:
The current status of the investment (green flag for active and red flag for exited).
- Active
- Region
:
The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.
- South Asia
- Sector
:
We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.
- Communications and IT services
- Investment type :
- Debt
- Start date :
- June 2024
- Amount :
- $50m
- Currency of investment :
- USD
- Domicile
:
The company or investment fund’s place of incorporation.
- Pakistan
We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.
For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.
For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.
For direct equity investments, this is the date at which British International Investment exited the investment.
For debt investments, this is the date at which the final debt repayment was made.
For funds, this is the date at which the fund was terminated.
For underlying fund investments, this is the date at which the fund manager exited the investment.
The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.
For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.
The currency in which the investment was made.
- First published
