ICBC contributes to $40 million buyer’s credit loan for CDMA WLL Local Telephone Project

Project narrative

On August 25, 2003, ZTE’s CDMA WLL contract with Algérie Télécom was approved by the Algerian Ministry of Post and Information Communications Technology. This approval confirmed ZTE’s winning bid on the project contract, tendered on September 22, 2001. Then, on September 23, 2003, ZTE and Algérie Télécom signed a $40,000,000 commercial contract for the CDMA WLL Local Telephone Project. The Industrial and Commercial Bank of China (ICBC) and Société Générale reportedly issued a $40 million buyer’s credit loan to Algérie Télécom to support the implementation of this project. Algérie Télécom was to use the proceeds of the loan to finance its commercial contract with ZTE. The buyer’s credit loan was underwritten by China Export and Credit Insurance Corporation (Sinosure) for a 6.5 year period (which suggests that maturity length of the loan was 6.5 years). The National Bank of Algeria also issued a guarantee in support of this loan. The purpose of the project was to install two Wireless Local Loops (WLLs) with 240,000 line CDMA WLL digital telephone systems in the city of Algiers. It was completed, but its precise implementation start and end dates are unknown. ZTE ultimately delivered the project for a cost of $32,000,000, purportedly a fraction of the cost estimated by competing ICT firms. The completion of these WLLs led to another contract signing on January 1, 2005, in which ZTE agreed to build a CDMA network focused primarily in the provinces of Tizi Ouzou, Bouira, and Bejaia, although it also sought to reach 43 localities in total. Upon completion, this new infrastructure was expected to bring total network coverage in Algeria to 95%.