Silk Road Fund contributes $114 million to A/B loan with AIIB for Phase 1 of National Fiber Optic Broadband Network Project

In December 2017, the Asian Infrastructure Investment Bank (AIIB) approved an A/B loan of $239.2 million to the Oman Broadband Company (OBC) — a member of the state-owned Oman ICT Group (OICTG) — for Phase 1 of the National Fiber Optic Broadband Network Project. Then, on October 29, 2018, the Silk Road Fund entered into a participation agreement with the AIIB to provide a senior loan facility for Phase 1 of the National Fiber Optic Broadband Network Project. The Silk Road Fund's participation is via an A/B loan structure led by the AIIB. Under an A/B loan, one entity is the lender of record for the entire A and B loan portions (in this case $125.2 million from the AIIB). The lender of record then partners with other institutions who provide the B portion (in this case $114 million from Silk Road Fund). The purpose of the project is to improve the telecommunications connectivity in Oman and increase the digital literacy and productivity of its human capital. It will seek to accomplish this objective by rolling out a fiber optic broadband cable network to 406,003 homes/premises by the end of 2021. The first phase of the project focused primarily on providing fiber-to-the-home (FTTH) coverage in Muscat plus some urban areas outside Muscat. This involved the installation of fiber optic cables and associated infrastructure, such as telephone exchange nodes (transmitters and receivers), remote integrated multiplexers (RIM) or customer multiplexers (CMUX), and premises receivers, covering Muscat and other urban areas of Oman. Upon completion of phase one by the end of 2021, 80% of Muscat was expected to have have access to the high speed optical fibre network. Huawei Technologies Co., Ltd. was the contractor responsible for implementation. Phase 1 is complete, but its precise commencement and completion dates are unknown.

Additional details

1. This project is also known as the Oman Broadband Infrastructure Project or National Fiber Optic Broadband Network Project. The Chinese project title is 阿曼全国光纤宽带建设项目 or 阿曼光纤宽带项目 or 阿曼电信项目 or 阿曼全国光纤宽带建设项目. 2. The AIIB project identification number is 000027. 3. The total project cost through 2021 is estimated to be around $467 million, and is to be funded by equity, debt and operating cash flow from its on-going operation. 4. The Silk Road Fund may have also supported Phase 2 of this project. However, this issue requires further investigation. According to the AIIB website: ‘Following the completion of Phase 1, AIIB is financing the next phase of the network roll out (Phase 2), which is expected to complete by 2025 with the expected total funding of approximately USD151 million (the Project). The amount of a senior debt available for Phase 2 is sized at approximately USD46 million. The financing structure would blend the existing with additional debt’.

Number of official sources

14

Number of total sources

22