The Overseas Private Investment Corporation , the US government's development finance institution, is to provide a $250 million loan to Apollo Tower Myanmar, a builder and operator of telecommunication masts in the Southeast Asian nation.
The transaction marks OPIC's first investment in the country. “Telecommunications are a critical part of ongoing development across the world, and through this project, OPIC is looking to have a significant impact on those who previously lacked access to telecommunications cover in the country,” said Elizabeth Littlefield, OPIC president and chief executive, in a statement.
The development of towers by Apollo has helped Myanmar increase its mobile phone penetration rate from 5 percent to more than 75 percent in the last two years, with about 1,800 masts built since 2014.
The company plans to build more than 2,000 additional towers in its next phase of development. The OPIC financing aims to support Apollo as it seeks to provide voice and data coverage to more rural areas of Myanmar.
Currently, it provides services to all three licensed operators in the country: Telenor of Norway, Ooredoo of Qatar and state-owned Myanmar Posts and Telecommunications.
In March, the market welcomed a new player as the fourth, and last, telecoms license was awarded to a consortium led by Viettel , Vietnam's military-run telecoms company. Through a $1.5 billion investment in the sector, the consortium plans to extend access to telecom services to 95 percent of Myanmar's 54 million population within three years.
Apollo's shareholders include TPG 's mid-market platform TPG Growth, Tillman Global Holdings and Myanmar Investments International.
“Apollo has been able to capitalise on a buoyant demand for mobile and telecommunications services, working closely with the network operators. The watershed OPIC financing, a unique collaboration between the private and public sectors, helps expand the critical infrastructure needed to bring telecommunications services to a larger portion of the Myanmar population,” said Sanjiv Ahuja, founder of Apollo and chairman of US-based Tillman Global. Tillman invests in and creates telecom and energy infrastructure businesses focused on developed and emerging markets.
“Apollo is leading the market in new tower construction, bringing cell phone and internet access to millions,” said Sanjay Banker, partner at TPG Growth. With over $7 billion of assets under management, TPG Growth made its debut investment in Myanmar in 2014 with Apollo.
Last December, the two US buyout firms also worked together on acquiring about 43,500 telecoms towers and related facilities in India from Reliance Communications for an estimated transaction value of $3.35 billion.