The International Finance Corporation (IFC) is extending a US$70 million financing package to Communication and Renewable Energy Infrastructure (CREI) Philippines to help fund the construction of new telecom towers, which will provide more people and businesses in the country with affordable and better mobile connectivity.
The project aims to bridge the digital divide through shared mobile infrastructure, a first in the Philippines in which new towers will be shared under an open access basis. In addition to creating a competitive market for tower co-locations, the investment will help mobile network capacity, enabling the operators to expand high-speed mobile networks – for 4G and 5G – across the country and offer better services at affordable rates.
The investment, announced on August 3, will allow CREI, a new tower company in the Philippines, to finance the construction of over 600 new towers by 2023. The financing package comprises a US$25.5 million loan from IFC and a parallel facility of US$44.5 million.
Commenting on the IFC financing, CREI chief executive officer Kadri Hakim says the facility will allow the company to meet its ambitions of expanding its digital infrastructure portfolio in the Philippines amid the challenges brought about by the Covid-19 pandemic.
CREI’s management team has extensive know-how through 15 years of telecoms operations across Southeast Asia and Africa, and its entry into the Philippines’ telecoms market brings robust experience in the design, construction and operations of towers. The company can also contribute to the provision of efficient energy solutions that help displace and reduce the use of diesel fuel on towers connected to the grid.
As such, the project can lead to significant greenhouse gas (GHG) savings in line with the Philippines’ climate goals. IFC will also assist CREI align its environmental and social practices with IFC’s performance standards.
“By supporting the entry of a new company, IFC’s investment will contribute to a strong independent tower market in the Philippines, increasing competition, creating jobs, spurring economic growth and helping cut emissions,” says IFC country manager for the Philippines Jean-Marc Arbogast. “Digital connectivity is more important than ever for businesses and people to thrive.”
According to the 2020 Global Digital Overview, the number of internet users in the Philippines has more than tripled from 23 million in 2010 to 73 million in 2020. Yet, the quality of mobile connectivity is inadequate given its pervasive network congestion.
The Philippines ranks 95th out of 142 countries for mobile internet download speed, says IFC. The number of mobile subscribers per tower, a measure of network congestion, is more than double the regional average. According to market estimates, to fill the gap, the Philippines would need a significant number of new towers built in the next seven to eight years to support the government's network capacity requirement.