The Islamic Development Bank grants Turkmenistan a USD 273 mil. loan for a telecommunication networks development project

On July 3rd, 2017, the Islamic Development Bank granted Turkmenistan a USD 273 mil. loan facility for a major project for enhancing its telecommunication networks.

The credit granted to Turkmenistan is part of a wider financing endeavour of the Islamic Development Bank. Thus, the members of the Board of Directors of the Bank, at the 320th meeting, on July 3rd, 2017, voted in favour of granting a total of USD 1.096 mil. as loans for strategic development projects in member states.

The IDB’s support of Turkmenistan consists of granting a long-term concessional loan facility, without any interest, for which Turkmenistan will only pay an administrative fee.

After the approval of this loan, the beneficiary signs the loan agreement with the bank, whereby the beneficiary and the bank begin the implementation and, respectively, the supervision stage. The last stage begins after the implementation of the project and consists of an impartial evaluation of the execution of the project, conducted by the Operations Evaluation Office, an independent and distinct entity from the IDB. As the case may be, the Office provides reports on the real impact by comparing it with the predicted impact, hence offering a solid framework for recommendations and good practices in this field.

The loan granted to Turkmenistan will impact future suppliers and contractors through which Turkmenistan will upgrade and expand the telecommunications networks. In the end, the effects of the telecom sector investments are visible in the economic growth registered by the country and in the development of geographically disadvantaged communities.

Given the track record of past projects financed by such loans, the implementation may last anywhere from 2 to 12 years. The same estimates show that the Operations Evaluation Office shall likely conduct the evaluation of the impact within 2 to 5 years from the completion of the project.

Currently, Turkmenistan is in a continual development process of the telecom networks in the country. To that end, the main providers of mobile phone services (MTS and Altyn Asyr) have made incremental progress, providing their users with Internet through GPRS in 2008, and respectively through 3G in 2010 and 4G in 2013. Also in 2013, the providers started offering unlimited Internet subscriptions.

Published by Chamber of Commerce and Industry Romania-Turkmenistan

The Chamber of Commerce and Industry Romania-Turkmenistan (CCIRom-Tkm) is a non-governmental organization of public utility, autonomous and apolitical, founded in 2009 to promote the economic cooperation between Romania, Turkmenistan and other countries in the Central Asian region.

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