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IDB approves first private sector department loan to Chile

The Inter-American Development Bank today announced the approval of a $25 million loan to Comunicación y Telefonía Rural S.A to provide fully functional telephone service in areas of southern Chile where service is now minimal.

The loan is the first to a telecommunications company and the first to Chile from the IDB´s Private Sector Department, which was established in 1995 to provide greater resources for infrastructure development.

The loan will enable Comunicación y Telefonía Rural – which is owned by SR Telecom, Inc., of Canada – to develop a rural telecommunications network in nine zones in southern Chile that will include 22,500 lines, of which approximately 1,650 will be public pay phones installed under the terms of Chile´s special rural Telecommunications Development Program.

The nine service zones are around Talca, Linares, Chillán, Concepción, Los Angeles, Temuco, Valdivis, Osorno and Puerto Montt.

The Export Development Corp. of Canada is providing a $25 million loan for the project, while investors are providing a minimum of $52 million in equity and $11.9 million in investments from the revenue stream.

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