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                                                                   EXHIBIT 10.14

                                                           EXECUTION COUNTERPART

                                                         EDC LOAN NO.: CHIL-7078
                                                        IDB LOAN NO.: 1227/OC-CH

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                  AMENDED AND RESTATED PROJECT FUNDS AGREEMENT

                          Dated as of December 22, 1999

                                      among

                                SR TELECOM INC.,

                      COMUNICACION Y TELEFONIA RURAL S.A.,

                         EXPORT DEVELOPMENT CORPORATION

                                       and

                         INTER-AMERICAN DEVELOPMENT BANK

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                  AMENDED AND RESTATED PROJECT FUNDS AGREEMENT (this
"Agreement"), dated as of December 22, 1999, among SR TELECOM INC., a
corporation duly organized and validly existing under the laws of Canada
("SRT"), COMUNICACION Y TELEFONIA RURAL S.A., a sociedad anonima duly organized
and validly existing under the laws of Chile (the "Borrower"), EXPORT
DEVELOPMENT CORPORATION, a corporation established by an Act of the Parliament
of Canada ("EDG"), and INTER-AMERICAN DEVELOPMENT BANK, an international
organization established by the Articles of Agreement among its member countries
("IDS", together with EDC, the "Senior Lenders").

                                   WITNESSETH

                  WHEREAS, the Borrower, which is the indirectly, wholly-owned
Subsidiary of SRT, has undertaken to design, construct, install and operate a
rural telecommunications network in nine primary zones of Chile (the "Project");

                  WHEREAS, in order to finance the development and construction
of the Project, the Borrower has requested that EDC and IDB separately make
loans to it in an aggregate principal amount not exceeding $50,000,000;

                  WHEREAS, in order to finance a portion of the Project, the
Borrower and EDC are parties to an Amended and Restated Loan Agreement dated as
of the date hereof (the "EDC Loan Agreement"), providing, subject to the terms
and conditions thereof, for a loan to be made by EDC to the Borrower in an
aggregate amount not exceeding $25,000,000;

                  WHEREAS, in order to finance a portion of the Project, the
Borrower and IDB are parties to a Loan Agreement dated as of the date hereof
(the "IDB Loan Agreement" together with the EDC Loan Agreement, the "Senior Loan
Agreements"), providing, subject to the terms and conditions thereof, for a loan
to be made by IDB to the Borrower in an aggregate amount not exceeding
$25,000,000;

                  WHEREAS, to induce the Senior Lenders to enter into their
respective Senior Loan Agreements and as a condition precedent under the Common
Agreement, SRT has, inter alia, entered into this Agreement with the Senior
Lenders to undertake certain obligations for the benefit of the Senior Lenders;

                  NOW, THEREFORE, in consideration of the premises and of the
execution of the Senior Loan Agreements and for the making of the loans
thereunder, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, SRT agrees with the Senior Lenders
as follows:

                                    SECTION 1

                         DEFINITIONS AND INTERPRETATION

                  Section 1.01 Definitions. Each capitalized term used herein
(including the preamble and recitals hereto) and not otherwise defined herein
shall have the meaning assigned

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to that term in Appendix A to the Amended and Restated Direct Agreement dated as
of the date hereof (the "Direct Agreement") among SRT, the Borrower and the
Senior Lenders.

                  "Credit Enhancement Instrument" means a stand-by letter of
credit or similar instrument which has the purpose of securing the obligations
of SRT hereunder, issued by an internationally recognized financial institution
satisfactory to the Senior Lenders and in form and substance satisfactory to the
Senior Lenders.

                  "Minimum Rating" means a long-term credit rating at least
equal to BB- from the Rating Agency.

                  "Rating Downgrade" means any downgrade of SRT's credit rating
by the Rating Agency to a new level which is below the Minimum Rating.

                  "Rating Agency" means Standard & Poor's Corporation.

                  Section 1.02 Interpretation. The rules of interpretation set
out in the Direct Agreement shall apply mutatis mutandis to this Agreement as if
set out in full herein.

                                    SECTION 2

                                  PROJECT FUNDS

                  Section 2.01 SRT's Obligations.

                  (a) Subject to and in accordance with the terms and conditions
hereof, SRT shall provide funds to the Borrower as follows:

                  (i) so as to, at all times prior to Financial Completion,
         maintain SRT's Initial Equity Investment;

                  (ii) at any time prior to Completion of Network Construction,
         in the event that Capital Expenditures incurred in connection with the
         Project exceed $102,000,000 (such excess amount being referred to as
         the "Cost Overrun") and the Borrower is unable to pay Capital
         Expenditures incurred in connection with the Project when such
         obligations are due and payable, in an amount equal to the Cost Overrun
         less amounts previously transferred to the Borrower pursuant to this
         clause (ii);

                  (iii) during the period from the earlier of (A) December 31,
         2000 or (B) Completion of Network Construction, to Financial
         Completion, in the event that the Borrower has insufficient funds to
         pay any of its obligations when such obligations are due and payable in
         an aggregate amount equal to such obligations which the Borrower is
         unable to pay; provided, however, that the aggregate amount provided by
         SRT to the Borrower pursuant to this clause (iii) shall not exceed $12
         million;

                  (iv) to permit the Borrower to deposit into the Debt Service
         Reserve Account, on or prior to December 31, 2002, an amount equal to
         the Debt Service Reserve Deficiency

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         existing on such date after the application of (A) clause "eighth" of
         Section 4.03(b), (B) Section 4.07(a) and (C) Section 4.06(b)(ii), in
         each case, of the Common Agreement;

                  (v) in the event that on or prior to January 31, 2003, the
         Borrower shall have failed to demonstrate that Financial Completion
         occurred no later than December 31, 2002, to permit the Borrower to pay
         on such date to the Senior Lenders for application against the
         aggregate outstanding Obligations as determined on such date, an amount
         equal to that portion of the aggregate outstanding Obligations which
         the Borrower would need to pay in order to permit the Borrower to
         comply with the requirements of Section 8.20(f) of the Common
         Agreement; provided that the aggregate amount funded by SRT pursuant to
         the clauses (iii), (iv) and (v) of this Section 2.01 (a) shall not
         exceed $12,000,000 in the aggregate; and

                  (vi) to permit the Borrower to pay to the Senior Lenders the
         aggregate outstanding amount of the Obligations in the event that (A)
         SRT is in default of any of its obligations under this Agreement,(B)
         SRT is in default of any of its obligations under the Direct Agreement
         or the Performance Undertaking, and such default results in a Borrower
         Material Adverse Effect or a SRT Material Adverse Effect or (C) SUBTEL
         has terminated one or more Concessions due to the Borrower's failure to
         perform its obligations thereunder, which termination, when taken
         together with all previously terminated Concessions, results in a
         Borrower Material Adverse Effect.

                  (b) SRT shall not be obligated to provide funds as set forth
in Section 2.01 (a) until it has received a written notice from the Senior
Lenders to such effect, which notice shall:

                  (i) only with respect to the funds provided in 2.04(a)(ii),
         give SRT a thirty-five day period on or prior to the end of which such
         funds must be provided to the Borrower; and

                  (ii) specify the amount required and provide details of the
         calculation of the funds to be provided pursuant to Section 2.01 (a).

                  (c) The funds referred to in clauses (i), (ii), (iii), (v) and
(vi) of Section 2.01(a) shall be deposited, in immediately available funds, in
the Operating Account and the funds referred to in clause (iv) of Section
2.01(a) shall be deposited, in immediately available funds, in the Debt Service
Reserve Account.

                  (d) The Borrower and SRT agree that the Senior Lenders may
take any steps, actions, suits or proceedings deemed necessary or desirable by
the Senior Lenders to secure payments by SRT as contemplated hereunder and/or
enforce any other provisions hereunder.

                  Section 2.02 Form of Project Funds. Each advance of funds to
the Borrower hereunder made by SRT shall, at the option of SRT, be made in the
form of cash equity or Intercompany Loans, the latter being Subordinated
Indebtedness.

                  Section 2.03 Nature of Obligations.

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                  (a) SRT's obligations under this Agreement are direct,
unconditional and irrevocable and may be enforced by the Senior Lenders without
first having recourse to any other security and without first taking any steps
or proceedings against the Borrower.

                  (b) The obligations of SRT hereunder shall not be affected or
impaired by:

                  (i) any invalidity or irregularity in whole or in part of any
         Transaction Documents;

                  (ii) any waiver by a Senior Lender of the performance or
         observance by the Borrower of any of the agreements, covenants, terms
         or conditions contained in any Financing Document;

                  (iii) any indulgence in or the extension of the time for
         payment by the Borrower of any other obligations under or arising out
         of any Senior Loan, any Financing Document or the extension or renewal
         thereof;

                  (iv) the modification or amendment (whether material or
         otherwise) of any duty, agreement or obligation of the Borrower set
         forth in any Financing Document or the involuntary liquidation, sale or
         other disposition of all or substantially all the assets of the
         Borrower;

                  (v) receivership, insolvency, bankruptcy, reorganization, or
         other similar proceedings affecting the Borrower or any of its assets;

                  (vi) the release or discharge of the Borrower by operation of
         law from the performance or observance of any agreement, covenant, term
         or condition contained in any Financing Document without the consent of
         any Senior Lender party thereto;

                  (vii) the consolidation or merger of the Borrower; or

                  (viii) any other cause or circumstance, whether similar or
         dissimilar to the foregoing, which might otherwise constitute a defense
         available to, or discharge of, the Borrower or SRT.

                  Section 2.04. Credit Enhancement.

                  (a) If at any time during the term of this Agreement, SRT
receives a Rating Downgrade, SRT shall (i) immediately notify the Senior Lenders
of such Rating Downgrade, providing copies of the rating documents to the Senior
Lenders and (ii) within the 30 days following receipt of such Rating Downgrade,
provide the Senior Lenders with a Credit Enhancement Instrument naming both
Senior Lenders as beneficiaries thereof; provided, however, that if SRT requests
the Senior Lenders to perform a credit review pursuant to sub-section (c) below,
SRT may delay the delivery of the Credit Enhancement Instrument until either of
the Senior Lenders notify SRT in writing of the result of the credit review.

                  (b) If subsequent to SRT's delivery of a Credit Enhancement
Instrument pursuant to the Rating Downgrade in sub-section (a) above, the Rating
Agency issues a Minimum Rating

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or a higher rating, the Senior Lenders shall, within 30 days following receipt
of documentary evidence of such Minimum Rating or a higher rating, authorize the
termination of the Credit Enhancement Instrument provided by SRT. Upon the
issuance of the Minimum Rating or a higher rating and the termination of the
Credit Enhancement Instrument, SRT shall be subject to sub-section (a) above.

                  (c) Notwithstanding sub-section (a) above, if SRT receives a
Rating Downgrade, it shall have the right, within 30 days following the receipt
of the Rating Downgrade, to request the Senior Lenders to perform a credit
review of SRT, such credit review to be conducted in the manner in which the
Senior Lenders reasonably determine. SRT agrees that it will provide the Senior
Lenders and their agents, officers and employees with all its financial
information requested by the Senior Lenders and that it will allow the Senior
Lenders and their agents, officers and employees access to its officers and
employees in the course of the requested credit review. Once the credit review
is completed, either Senior Lender shall determine, in its sole discretion and,
absent manifest and material error, without any right of SRT to contest such
determination, whether a Credit Enhancement Instrument must be provided by SRT
pursuant to sub-section (a) above and such Senior Lender shall provide written
notice of such determination to SRT and the other Senior Lender. If either
Senior Lender determines that SRT shall provide a Credit Enhancement Instrument,
SRT shall, within 30 days following receipt of such notice, provide a Credit
Enhancement Instrument naming both Senior Lenders as beneficiaries thereof.

                  (d) If both of the Senior Lenders determine, in accordance
with sub-section (c) above, that SRT shall not provide a Credit Enhancement
Instrument, until the earlier of the date on which (i) SRT obtains a Minimum
Rating in accordance with sub-section (b) above, or (ii) SRT delivers a Credit
Enhancement Instrument naming both Senior Lenders as beneficiaries thereof, the
Senior Lenders shall have the right to perform an annual credit review of SRT,
in the same manner specified in sub-section (c) above. Upon the conclusion of
each annual credit review of SRT, either Senior Lender shall determine, in its
sole discretion and, absent manifest and material error, without any right of
SRT to contest such determination, whether SRT shall provide the Senior Lenders
with a Credit Enhancement Instrument in the terms of sub-section (a) above and
such Senior Lender shall provide written notice of such determination to SRT and
the other Senior Lender. If either Senior Lender determines that SRT shall
provide a Credit Enhancement Instrument, SRT shall, within 30 days following
receipt of such notice, provide both of the Senior Lenders with a Credit
Enhancement Instrument naming both Senior Lenders thereof as beneficiaries.

                  (e) SRT shall pay the Senior Lenders, or any third party who
undertakes on their behalf to consult or conduct the credit review, a fee in the
amount of twenty-five thousand Dollars ($ 25,000) in connection with each credit
review of SRT to be performed by the Senior Lenders pursuant to sub-sections (c)
and (d) above, such fee to be increased on each anniversary of the execution of
this Agreement, in the same percentage that the Consumer Price Index published
by the Bureau of Labor Statistics of the U.S. Department of Labor increased
during the immediately prior calendar year. SRT shall pay the credit review fee
not later than 10 days prior to the initiation of the relevant credit review in
accordance with the Senior Lenders' payment instructions. In addition, travel
and out of pocket expenses incurred by the Senior Lenders in the performance of
the credit review, must be paid by SRT within 15 days following receipt of the
Senior Lenders' bill, together with appropriate supporting documentation. The
Senior Lenders

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may refrain from performing a credit review if they have not received the
corresponding credit review fee and, in such event, the Senior Lenders shall
have the right to require SRT to provide a Credit Enhancement Instrument
pursuant to and in accordance with sub-section (d) above.

                  (f) SRT agrees that it shall arrange for a credit analysis
update by the Rating Agency at least annually and SRT shall send to the Senior
Lenders copies of the credit rating update issued by the Rating Agency. SRT
further agrees to maintain the credit rating services of the Rating Agency
during the term of this Agreement. If SRT fails to obtain the annual credit
analysis update or discontinues the credit rating services required hereunder,
SRT shall immediately provide the Senior Lenders with a Credit Enhancement
Instrument naming both Senior Lender as beneficiaries thereof.

                                    SECTION 3

                         REPRESENTATION AND WARRANTIES

                  SRT confirms the representations and warranties contained in
Section 4 of the Direct Agreement, which representations and warranties are
incorporated herein by reference as if fully set forth in this Agreement. In
addition, SRT represents and warrants that:

                  (a) No Event of Default has occurred and is continuing or will
         occur upon the execution and delivery of this Agreement; no event has
         occurred and is continuing that constitutes, or with the lapse of time
         or the giving of notice or both would constitute, a default hereunder
         or under any agreement or instrument evidencing any indebtedness of SRT
         which gives the holder thereof the right to accelerate payment of such
         indebtedness prior to its scheduled maturity, and no such event will
         occur upon the execution and delivery or performance of this Agreement;
         and

                  (b) there are no actions, proceedings or claims pending or, to
         the best knowledge of SRT, threatened against it, the adverse
         determination of which might have a materially adverse effect on its
         ability to perform its obligations hereunder, or affect the validity or
         enforceability hereof.

                                    SECTION 4

                                  MISCELLANEOUS

                  Section 4.01. Termination. This Agreement shall terminate on
the earlier of the date on which (a) all of the Commitments have been reduced to
zero or have expired and (b) all of the Borrower's Obligations under the Senior
Loan Agreements are indefeasibly paid in full. Upon the termination of this
Agreement, the obligations of the parties hereto shall terminate.

                  Section 4.02. Severabiliry. If any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby. If any provisions of this Agreement shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of such provision shall not in any way be affected or impaired in any other
jurisdiction thereby.

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                  Section 4.03. Notices. Any notice, claim, request, demand,
consent designation, direction, instruction, certificate, report or other
communication to be given hereunder shall be given in writing in the English
language (or accompanied by an accurate English language translation upon which
the recipient shall have the right to rely for all purposes) and will be deemed
duly given when (a) personally delivered, (b) sent by facsimile transmission
(but only if, immediately after the transmission, the sender's facsimile machine
records in writing the correct answerback) or (c) ten days have elapsed after
mailing by certified or registered mail, postage prepaid, in each case addressed
to a party at its address or facsimile transmission number as set forth below or
to another address or facsimile number of which that party has given notice.
Notice of address or facsimile number change shall be effective only upon
receipt.

                  If to SRT:

                  8150 Trans Canada Highway
                  St. Laurent, Quebec, H4S 1M5
                  Attention:  President & CEO
                  Telecopier: 514-335-2035

                  If to the Borrower:

                  Av. Vitacura 2771, Oficina 405-B
                  Las Condes, Santiago, Chile
                  Attention:   Mario Andrade
                  Telecopy No. 562-236-5776
                  Telephone No.562-236-5656

                  If to EDC:

                  151 O'Connor
                  Ottawa, Canada, K1A 1K3
                  Attention:  Loans Operations
                  Telecopier: 613-598-2514

                  If to IDB:

                  Inter-American Development Bank
                  Private Sector Department
                  1300 New York Avenue, N.W.
                  Washington, DC 20577
                  Attention:  Loan Administration Unit
                  Telecopier: 202-623-3639

                  Section 4.04 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                  Section 4.05 JURISDICTION, SERVICE OF PROCESS AND VENUE.
THE PROVISIONS OF SECTION 9(I), (J), (K) AND (L) OF THE DIRECT

                             PROJECT FUNDS AGREEMENT

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AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE AS IF FULLY SET FORTH IN THIS
SECTION 4.04.

                  Section 4.06 WAIVER OF JURY TRIAL. EACH PARTY HERETO
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                  Section 4.07 Amendments. This Agreement may be amended only by
an agreement in writing executed by each of the parties hereto.

                  Section 4.08 Expenses. SRT agrees to reimburse each Senior
Lender for all reasonable costs and expenses of each Senior Lender (including,
without limitation, the reasonable fees and expenses of legal counsel) in
connection with any default hereunder and any enforcement or collection
proceeding resulting therefrom, including, without limitation, all manner of
participation in or other involvement with: (a) bankruptcy, insolvency,
receivership, foreclosure, winding up or liquidation proceedings, (b) judicial
or regulatory proceedings and (c) workout, restructuring or other negotiations
or proceedings (whether or not the workout, restructuring or transaction
contemplated thereby is consummated); and the enforcement of this Section 4.08.

                  Section 4.09 Benefit of Agreement. Nothing in this Agreement,
express or implied, shall give to any Person, other than the parties hereto and
their successors and permitted assigns hereunder and under any Transaction
Document, any benefit or any legal or equitable right or remedy under this
Agreement.

                  Section 4.10 Remedies. No remedy herein conferred upon the
Senior Lenders is intended to be exclusive of any other remedy and each and
every such other remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise.

                  Section 4.11 Effectiveness. This Agreement shall come into
full force and effect, and amend and restate, the Project Funds Agreement dated
as of April 13,1999 among SRT, the Borrower and EDC as of the date on which the
EDC Loan Agreement becomes effective in accordance with Section 6 thereof.

                  Section 4.12 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original but
all of which together shall constitute one and the same instrument. Delivery of
an executed counterpart of a signature page of this Agreement by telecopy shall
be effective as delivery of a manually executed counterpart of this Agreement;
provided that original signature pages of each party hereto are delivered to
each other party hereto within five Business Days.

                  Section 4.13 Captions. The captions and section headings in
this Agreement are for convenience of reference only and shall not limit or
otherwise affect any of the terms hereof.

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                  Section 4.14 No Waiver. No failure on the part of the Senior
Lenders to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Senior Lenders of any
right, power or remedy hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or remedy.

                  Section 4.15. Successors and Assigns. This Agreement shall be
binding upon and enure to the benefit of the parties hereto and their respective
successors and assigns. SRT shall not assign or transfer any of its rights or
obligations hereunder without the consent of the Senior Lenders.

                  Section 4.16. Judgment Currency. If for the purpose of
obtaining judgment in any court it is necessary to convert a sum due hereunder
in Dollars into another currency (in this Section 4.16 called the "judgment
currency"), the rate of exchange that shall be applied shall be that at which
in accordance with normal banking procedures the Senior Lenders could purchase
such Dollars with the judgment currency on the Business Day next preceding the
day on which such judgment is rendered. The obligations of SRT in respect of any
such sum due from it to the Senior Lenders hereunder or under any other
Financing Document shall, notwithstanding the rate of exchange actually applied
in rendering such judgment, be discharged only to the extent that on the
Business Day following receipt by the Senior Lenders of any sum adjudged to be
due hereunder in the judgment currency the Senior Lenders may in accordance with
normal banking procedures purchase and transfer Dollars to New York City with
the amount of the judgment currency so adjudged to be due; and SRT hereby, as a
separate obligation and notwithstanding any such judgment, agrees to indemnify
the Senior Lenders against, and to pay the Senior Lenders on demand, in Dollars,
the amount (if any) by which the sum originally due to the Senior Lenders in
Dollars hereunder exceeds the amount of the Dollars so purchased and
transferred.

                             PROJECT FUNDS AGREEMENT

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                  IN WITNESS WHEREOF, the parties hereto, by their officers duly
authorized, have caused this Agreement to be duly executed and delivered as of
the date first above written.

                                  SR TELECOM INC.

                                  By: /s/ W. Ronald Couchman
                                      ------------------------------
                                      Name:  W. Ronald Couchman
                                      Title: Chief Executive Officer

                                  By: /s/ David L. Adams
                                      -------------------------------
                                      Name:  David L. Adams
                                      Title: Chief Financial officer

                             Project Funds Agreement

<PAGE>

                                  COMUNICACION Y TELEFONIA
                                      RURAL S.A.

                                  By: /s/ D'Arcy J. Leddy
                                      -------------------------------
                                      Name:  D'Arcy J. Leddy
                                      Title: Director

                             Project Funds Agreement

<PAGE>

                                  EXPORT DEVELOPMENT CORPORATION

                                  By: /s/ Bruce Dunlop
                                      --------------------------------
                                      Name:  Bruce Dunlop
                                      Title: Financial Services Manager

                                  By: /s/ Brian Craig
                                      ---------------------------------
                                      Name:  Brian Craig
                                      Title: Financial Services Manager

                             Project Funds Agreement

<PAGE>

                                  INTER-AMERICAN DEVELOPMENT
                                    BANK

                                  By: /s/ Bernardo Frydman
                                      ---------------------------------
                                  Name:  Bernardo Frydman
                                  Title: Debuty Manager, Private Sector
                                  Department

                            Project Funds Agreement