The Export Credits Guarantee Department (ECGD), the UK’s official Export Credit Agency, has underwritten two UK-sourced contracts totalling $30 million (USD) which will help expand mobile phone networks in Kazakhstan.

The two contracts, which were awarded to Motorola under a five year frame agreement announced in May 2005, are for GSM cellular phone infrastructure equipment and associated software supplied from the UK company’s Swindon facility to KaR-Tel, Kazakhstan's second largest mobile phone operator.

UK Trade Minister Ian Pearson said: “ECGD’s support for these two multi-million dollar contracts in Kazakhstan represents the Department’s first mobile phone network deal in this market.

“Kazakhstan is ECGD’s most active market in Central Asia and there is plenty of appetite for the Department to underwrite further business in the country.”  

Under this phase of the network expansion, ECGD guaranteed a $28 million (USD) finance facility made available by Citigroup for the purchase of the equipment by KaR-Tel. OJSC VimpelCom, KaR-Tel’s parent company, provided additional security to support this transaction.

Yusuf Khan, Vice President in Citigroup's Export & Agency Finance Group, said: "This deal involves the first ECGD-supported supplier credit facility for Citigroup in the Kazakhstan telecoms market. ECGD's guarantee allowed Citigroup to provide the maximum loan period possible for KaR-Tel."

Mobile phone penetration in Kazakhstan currently stands at 13 per cent although potential growth is strong, given the country’s oil-rich status.  

KaR-Tel currently has approximately 31 per cent share of the country’s cellular phone market.

NOTES TO EDITORS

1.  ECGD, the Export Credits Guarantee Department, is the UK’s official Export Credit Agency. A Government Department reporting to the Secretary of State for Trade and Industry, it has nearly 90 years’ experience of working closely with exporters, project sponsors, banks and buyers to help UK exporters of capital equipment and project-related goods and services. ECGD does this by providing:

• insurance against non-payment to UK exporters;
• help in arranging finance packages for buyers of UK goods by guaranteeing bank loans; and
• Overseas Investment Insurance which gives UK investors insurance against political risks.

2.  More information about ECGD, along with other press releases, can be found at www.ecgd.gov.uk

3.  More information on the frame agreement between Motorola and KaR-Tel announced on 18 May 2005 can be found in Motorola’s press release at http://www.motorola.com/mediacenter/news/detail/0,,5498_5488_23,00.html

ECGD PRESS ENQUIRIES:

Azara Bibi, ECGD Press Office, Tel: 020 7512 7421

(Out of Hours: 07790 887852)