In spite of the current global economic slowdown South Africa’s newest telecommunications operator has secured R4.4 billion from major financial institutions and development agencies. The fixed-line operator has secured the debt facility from a consortium of institutions including Nedbank Capital, Investec Bank, the Development Bank of Southern Africa, the Industrial Development Corporation and the Infrastructure Finance Corporation.

In addition, Neotel will also be receiving a R3.1 billion cash injection from its shareholders, which include Tata Communications, Eskom, Transnet, and black empowerment partner groups, bringing the company’s

total expansion funding to R7.5 billion.

Neotel chief financial officer, Arun Gupta said that for a debt facility deal of this size to go through despite the current global economic crisis showed the confidence that lenders had in the company.

"This in undoubtedly one of the most significant project financings of the year, and the ability to pull off a financing of R4.4 billion under current financial market conditions is a testament to the belief in the offering, which will change the shape of telecommunications in South Africa.”

The funding will support the roll-out of Neotel’s infrastructure beyond the country's major metropolitan areas (Johannesburg, Pretoria, Durban and Cape Town) where its services are currently limited to.