IFC anchors Armenia`s first sustainability-linked bonds

ArmInfo. The International Finance Corporation (IFC) is anchoring a landmark $75 million  sustainability-linked bond issuance by Team Telecom Armenia with a $13.5 million participation to boost digital infrastructure in Armenia, as stated  in IFC press release.  Armenia.

It should be noted that a the Asian Development Bank, the European  Bank for Reconstruction and Development (EBRD) and the Asian  Development Bank (ADB) and  PROPARCO  (AFD) are also participating in  the bond issuance. The statement noted: "Armenia faces a number of  infrastructure and connectivity challenges, including slower mobile  and fixed broadband speeds compared to regional averages.  Connectivity is particularly limited in rural areas and low-income  groups, with 41% of the poor adult population lacking quality fixed  broadband service, hindering their access to vital information,  economic opportunities, and essential services. Addressing these gaps  requires investments estimated at up to $600 million."

"Green" Telecom Armenia bonds, arranged by Ameriabank, set be listed  on the Armenia Stock Exchange.  will  finance critical expansion  projects for Team Telecom Armenia, including the roolout of 4G+ and  fiber-to-the-home (FTTH) networks. The company plans to extend  coverage to an additional 300,000 mobile data customers and connect   90,000 more homes to high-speed Internet by 2029. The project will  increase 4G+ coverage in low-income rural areas from the current 74%  to 96%, and FTTH will expand from 14% to 35%. 

Team Telecom Armenia CEO Hayk Yesayan said: "This bond issuance marks  a pivotal step in modernizing Armenia's telecommunications landscape  in advancing toward a responsible and sustainable digital future.   This is both an investment opportunity and a means to support the  development of the country's telecommunications sector." The CRSD  bonds are financing tools tied to a company's sustainability goals.   For example, a company might commit to lowering emissions or using  renewable energy. If these targets are missed, the interest rate may  be increased. Under the bond's innovative sustainability structure,  Team Telecom Armenia will be incentivized to reduce its greenhouse  gas emissions by 20% by October 1, 2027, and by 40% by November 1,  2029, compared to its 2023 baseline. In addition, bond  proceeds will  refinance the company's existing loans to enable its investment  program. IFC will also support the company's efforts to reduce   gender gaps through a gender assessment, develop a gender equality  policy, and implement workshops to increase its ratio of female  managers.

Ivana Fernandez Duarte, IFC Regional Director for the South Caucasus,  said: "IFC's investment backs Team Telecom Armenia's efforts to bring  faster, better internet services to homes and communities across the  country. As the country's first CRSD bond, it also sets a strong  example for other companies, encouraging them to pursue financial  options that align business growth with environmental and social  responsibility." This CRSD bond issuance marks another milestone in  IFC's partnership with Team Telecom Armenia, which began in 2022,  when IFC provided a loan to support the company's capital investment  plan. IFC's investment is aligned with the World Bank Group's  strategic priorities in Armenia, including supporting export-enabling  sectors, such as information and communications technology, and  enhancing access to reliable infrastructure.