EBRD’s $20 million loan will help finance telecoms growth in Armenia

Armenians will see their fixed and mobile phone services improve as a result of a US$ 20 million loan from the European Bank for Reconstruction and Development (EBRD) to leading Armenian telecoms company Telecom Armenia to finance growth, including network expansion in rural areas, and refinance existing debt.

Telecom Armenia is undertaking a seven-year multi-million network improvement programme to upgrade fixed and mobile networks around the country, including in rural areas. Additional financing is provided by the International Finance Corporation (IFC) and Ameriabank, amounting to a total financing package of $45 million.

The investment comes in the wake of the Covid-19 pandemic, which emphasised the need for faster and more reliable internet connections. The project supports 4G mobile network expansion and the rollout of a state-of-the-art fibre to the home network across the capital Yerevan, secondary cities and rural areas, increasing the digital connectivity and competitiveness of businesses across Armenia and making the network greener and more energy efficient.

“As well as enhancing digitalisation and energy efficiency, the project is consistent with the EBRD’s two strategic priorities for Armenia, strengthening private sector competitiveness and promoting sustainable infrastructure through commercialisation and green economy transition,” said Dirk Werner, the EBRD’s Director for Telecoms, Media and Technology.

Aleksandr Yesayan, Team Telecom Armenia’s Chairman and co-founder said: “We welcome our long-term partnership with the EBRD, especially given the reduced investor appetite amid global developments. This support will enable us to accelerate our capital investment program and expand and upgrade both our fixed and mobile networks and improve service quality to both individual subscribers and business clients, which will spur competitiveness, innovation, and economic growth in Armenia.”

Hayk Yesayan, Team Telecom Armenia’s CEO and co-founder said: “This funding will significantly speed up the region’s best 25 GB/s Next Generation Network construction. Bringing this network to life is our strategic project. As part of the building process, we are going to connect our mobile system to the new fixed broadband infrastructure and greatly increase the quality of mobile and fixed communications throughout all Armenia.”

This is the first major signing since EBRD’s recently appointed Head of Yerevan Resident Office. George Akhalkatsi started the role in early May. He said: “I am excited to sign this important transaction with a major private sector player in Armenia. We believe the project will bring tangible benefits to Team Telecom customers and have a positive effect on wider economy.”

Telecom Armenia is the leading fixed-line operator in Armenia and the country’s second largest mobile operator. It was acquired in October 2020 by telecom entrepreneurs Hayk and Aleksandr Yesayan. The project’s refinancing component will be used to refinance Telecom Armenia’s existing debt, incurred during the company’s leveraged buyout in 2020, and simplify its capital structure. 

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