IFC, EBRD, EU, and France Help Deliver Largest FDI in Ukraine Since Invasion, Strengthen Telecom Infrastructure

• Joint funding from IFC and EBRD enables an investment program to expand and modernize Ukraine’s telecom infrastructure
• Improved coverage for 10 million customers and more reliable and faster internet for 4 million homes
• Largest single FDI in Ukraine since Russia’s invasion will send strong signal to investors

Kyiv, Ukraine, October 10, 2024—IFC, a member of the World Bank Group, and the European Bank for Reconstruction and Development (EBRD), with support from the European Commission (EC) and the Government of France in form of guarantees, are enabling an investment program to modernize, expand, and improve telecom service quality in Ukraine.

IFC and the EBRD are jointly providing a total of $435 million in long-term debt ($217.5 million each organization) to support a landmark project involving two leading Ukrainian telecom companies, lifecell LLC and Datagroup-Volia, who recently merged to form a new group, Datagroup-Volia-lifecell. The investment will support the merged group in enhancing network resilience and improving digital connectivity across Ukraine.

NJJ, a French telecom investment holding company owned by investor Xavier Niel, leads the new group with a majority stake. NJJ is partnering with Horizon Capital, a leading a leading private equity firm in Emerging Europe, and Mykhaylo Shelemba, former CEO of Datagroup-Volia, is now CEO of the new group.

Makhtar Diop, IFC’s Managing Director, said: “By strengthening digital connectivity and network resilience, we are delivering a vital service to millions of Ukrainians while reaffirming our commitment to the country. This project is the largest foreign direct investment by a major strategic investor since Russia’s invasion. It sends a strong message to global investors about the resilience and significant potential of Ukraine's economy."

Through this high-impact transaction, the merged group will deliver improved mobile connectivity to 10 million subscribers and provide faster and more reliable fixed broadband access to 4 million homes.

Leveraging its scale, the operational expertise of its new shareholders, and support from IFC and the EBRD, the group will also enhance protection against cybersecurity threats, introduce more competitive products and services, and implement best practice standards at a critical time. Additionally, the project will support the telecom sector's recovery from the estimated $1.9 billion in direct damages and $750 million in losses incurred since Russia’s invasion.

To mitigate investment risks, a portion of IFC’s loan will be covered by guarantees provided by the EC under the Ukraine Investment Framework and the government of France in support of IFC’s Economic Resilience Action (ERA) Program for Ukraine.

Since February 2022, IFC invested $1.6 billion, including over $1.1 billion from its own account and $530 million mobilized. This more than doubles the average annual financing levels before the invasion. The support is part of the World Bank Group's (WBG) response package, which has assisted more than 15 million Ukrainians by helping businesses stay afloat and enabling the government to provide essential services, pay wages, keep schools and hospitals open, and make critical repairs.

The WBG has mobilized more than $47 billion in emergency financing to date, including commitments and pledges from development partners.

Quotes from Sponsors and Lenders

Mark Bowman, EBRD Vice President, Policy and Partnerships:

“The telecom sector has been essential to Ukraine’s welfare and economic resilience since the war began. This operation will result in a large and reliable telecommunications operator, important domestically, as well as a very significant international investment into the Ukrainian economy, which we are proud to be part of.”

Jean-Noël Barrot, Minister for Europe and Foreign Affairs, France:

“The recovery and reconstruction of Ukraine will require the mobilisation of both public and private actors investing in Ukraine’s future. This investment the largest in over ten years - is a testimony of our commitment to a strong and lasting economic partnership with Ukraine. I am confident that it will serve as a flagship to highlight the wealth of investment opportunities and pave the way for other projects in the future.”

Antoine Armand, Minister of the Economy, Finance and Industry, France:

“France is committed to supporting the resilience and reconstruction of Ukraine’s economy, which will require attracting large private investments in key sectors. This is why we have launched guarantee facility programs with both the EBRD and IFC to de-risk new private investments in Ukraine. This landmark project is the first utilization of these facilities. It will ultimately help better connect businesses and people across Ukraine. And we look forward to supporting other projects."

Olivér Várhelyi, European Commissioner for Neighbourhood and Enlargement:

We are pleased that the European Union guarantees from the Ukraine Facility enable this landmark foreign investment into Ukraine. Today's agreement, which involves a significant financial commitment from the EU, will strengthen Ukraine's telecom infrastructure and service quality and enhance telecom connectivity for millions of Ukrainians in the most war-affected regions. The operation is proof of Ukraine's potential and our confidence in mobilizing investments for Ukraine.

Xavier Niel, Founder of Iliad Group & NJJ Holding:

“We are delighted to reach this significant milestone with international institutions IFC and EBRD. Without their support, the completion of our major investment in Ukraine's telecom sector would not have been possible. Our long-term financial partnership with EBRD and IFC underscores our shared commitment to Ukraine's economic growth and highlights the country’s promising investment potential.”

Lenna Koszarny, Founding Partner and CEO of Horizon Capital:

“We thank IFC and EBRD for their long-term partnership with Horizon Capital, and for backing our funds, co-investing with us, and providing financing in record time to enable this landmark transaction. Ukrainian consumers will reap the greatest benefits, with the ability to choose a reputable national telecom provider, backed by blue-chip capital and part of a global platform with over 100 million subscribers. This historic transaction proves Ukraine offers compelling, bankable deals, and the time to invest is now.”

Mikhail Shelemba, CEO of Datagroup-Volia-lifecell:

“I thank the IFC and the EBRD for their trust and support and look forward to this long-term partnership, which will enable a significant investment program, including investments in the network, licenses, equipment, and expansion of fixed and mobile communications infrastructure in Ukraine. Ukrainian businesses have huge potential for investment, which should continue, even in these difficult times.”