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MANILA, PHILIPPINES - The Asian Development Bank (ADB) will provide a $55 million loan to the leading mobile phone provider in Afghanistan, so it can extend its coverage to parts of the country that have little or no telecommunications infrastructure in place.
The loan to Telecom Development Company Afghanistan Ltd, which trades under the name Roshan, will also support the rollout of a mobile banking system called M-Paisa. Using M-Paisa, subscribers can transfer money through their mobile phones without having to open bank accounts. This innovative product will especially help the unbanked and will also give the population greater access to microfinance.
“This expansion will introduce mobile phone services to remote and war-torn areas, which lag far behind in the nation’s reconstruction efforts and for which telecom services are vital,” said Mr. Michael Barrow, a Director of ADB’s Private Sector Department.
“It will give people in remote areas better access to markets, access to information and will support families and communities that are often fragmented. It will also be a great boost for the private sector by helping businesses access new parts of the country.”
The Afghanistan telecom market has grown at an unprecedented pace since Roshan began operations in 2003. The company, whose network covers more than half the population, reached the 2 million active subscriber milestone this past June. This new funding will help accelerate expansion of Roshan’s network and services.
The total cost of the expansion will be $175 million, which includes capital expenditure into new districts, upgrading equipment, and transforming sites to use solar power. The balance of the funding will come from other investors.
Roshan, the Government of Afghanistan’s largest taxpayer, intends for the expansion to reach almost all semi-urban and major rural areas – furthering pro-poor and inclusive economic growth.
ADB has supported Roshan since it was established in 2003. After over 20 years of war, in 2003 only 80 thousand people had access to a phone, making Afghanistan one of the markets with the lowest phone penetration in the world.
ADB has approved nearly $1.3 billion in loans, grants and other support for Afghanistan since resuming operations in the country in 2002. The focus has been on rebuilding roads, power infrastructure and irrigation networks. At a donors’ conference in Paris in June, ADB pledged up to $1.3 billion in further assistance for the next five years.