| Project Detail |
The project involves an up to PHP4.8 billion senior secured project finance loan comprising PHP2.4 billion through ADB OCR, and PHP2.4 billion through parallel loan to support development, construction, and operations of up to 800 telecommunications towers in the Philippines.
Project Name Ison Nationwide Digital Connectivity Project
Project Number 57094-001
Borrower / Company iSON Tower Limited Inc.
Country / Economy Philippines
Location Nation-wide
The project involves an up to PHP4.8 billion senior secured project finance loan comprising PHP2.4 billion through ADB OCR, and PHP2.4 billion through parallel loan to support development, construction, and operations of up to 800 telecommunications towers in the Philippines.
Objectives and Scope
Globe and Smart provide Ison with search rings across the Philippines where they need towers to be constructed. Ison then identifies suitable locations within these search rings to lease land and construct towers. Once the towers are constructed, the MNOs install their communication equipment on the towers. Ison then manages the security and general maintenance of each tower through 15-year lease agreements.
All towers will only be funded post construction, thereby eliminating construction risk for lenders. Towers that are completed and earning revenues from MNOs will be eligible for financing subject to predefined environmental, social, development, and financial criteria. Once ADB confirms that these conditions have been satisfied, lenders will disburse up to an aggregate of PHP4.8 billion (approximately $84.9 million). Each drawdown will be right-sized in line with project milestones and contracted cashflows achieved.
Linkage to Country/Regional Strategy
The project is consistent with ADBs Strategy 2030 priorities of promoting quality infrastructure investments and enhancing connectivity in the region, expanding private sector operations to reach one-third of ADB operations in number by 2024, and mobilizing financing from commercial sources with a long-term cofinancing target for private sector operations of $2.50 for every $1.00 of ADB financing. Further, the project supports three of ADBs operational priorities: (i) addressing remaining poverty and reducing inequalities, (ii) accelerating progress in gender equality, and (iii) promoting livable cities. Finally, the project is consistent with the Operational Plan for Private Sector Operations by providing long-term private sector financing to strengthen ITC connectivity and access especially in underserved areas.
The project is directly linked to the core objectives of ADBs country partnership strategy for the Philippines, 2018-2023, which focuses on infrastructure investment and economic growth to address income inequalities and improve connectivity between communities and regions.
The project addresses a critical connectivity gap in infrastructure development in the Philippines. Access to the digital economy is one of driving forces for inclusive growth in remote underserved regions as it promotes the mobility of the population from less-productive sectors to better economic opportunities and improves productivity. |
