The European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) have this week pledged to provide $435 million in funding to support Ukraine's newly formed telecom company, Datagroup-Volia-lifecell.
Datagroup-Volia-lifecell has recently been formed out of a merger between Ukrainian telecom groups, Lifecell and Datagroup-Volia.
A consortium led by Xavier Niel's investment firm, NJJ Holding (NJJ), completed the double acquisition of Lifecell and Datagroup-Volia in Ukraine from Turkish carrier Turkcell for $524.3 million last month.
When the merger was concluded, Niel, who is the founder of French telco Iliad Group, noted that the company was seeking a $435 million loan.
At the time, the company said the loan will be used to invest in the company's network, licenses, equipment, and expansion of fixed and mobile infrastructure in Ukraine.
“The telecoms 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 in the Ukrainian economy, which we are proud to be part of," said Mark Bowman, EBRD Vice president, policy and partnerships this week.
The deal, which was first announced in January, is part of Niel's aims to establish a "telecoms champion" in the country, as he combines Lifecell and Datagroup-Volia into one entity.
The investment will support the country's telecom sector recovery. It's currently estimated that Ukraine has suffered $1.9 billion in direct damages and $750 million in losses incurred since Russia’s invasion in 2022.
The French government and the European Union have provided guarantees to cover a portion of the loans put forward by the EBRD’s and IFC.
Since February 2022, the EBRD has deployed €5 billion ($5.47bn) in Ukraine, focusing on supporting energy security, vital infrastructure, food security, trade, and the private sector, alongside key policy reforms.
"We are delighted to reach this significant milestone with international institutions IFC and the EBRD," said Niel, founder of Iliad Group and NJJ Holding.
"Their support is vital to the completion of our major investment in Ukraine’s telecoms sector. Our long-term financial partnership with the EBRD and IFC underscores our shared commitment to Ukraine’s economic growth and highlights the country’s promising investment potential.”
Datagroup-Volia is one of Ukraine's biggest fixed telecom and pay TV providers, while Lifecell is the country's third biggest mobile operator. Combined, the two companies have around 14 million customers.