Western Balkan Towers The proposed IFC investment consists of up to US$75 million to support Actis GP LLPs (Actis) ( https://www.act.is/ ) bid to acquire most of the macro tower sites of Telekom Srbija a.d. Beograd (TS or the Seller), (the Transaction). The Transaction is subject to clearance by all applicable regulatory and competition authorities and, if cleared, will lead to the establishment of the first truly independent telecom tower group headquartered in the Western Balkans.     The Seller is one of the largest telecom operators in the Western Balkans and is 58% owned by the Republic of Serbia. Prior to the sale, TS will carve out into separate tower companies (the TowerCos), its towers and passive infrastructure business, comprising 1,827 sites in total, 995 of which are located in Serbia, 725 are in Bosnia & Herzegovina, and 107 are in Montenegro. IFC and other private and institutional investors will invest equity in an investment vehicle that will be established and managed by Actis. The investment vehicle will own 100% of the TowerCoss shares. TS and its subsidiaries will be the TowerCos' anchor tenants under long-term master service agreements and have also committed to lease additional towers from the TowerCos under a build-to-suit program to be implemented over the next 4 to 6 years depending on the jurisdiction.       Actis participated in a wide auction process launched by the Seller in Q4 2022, and following multiple rounds, was selected as preferred bidder by June 2023, after which Actis entered into an exclusivity agreement and bilateral negotiations with TS. Project Outcomes: Improved access to quality mobile connectivity for individuals and businesses by supporting the development of high-speed mobile network coverage and capacity through the acquisition of MNO-captive mobile towers and the construction of new ones to be shared by mobile network operators in the TowerCoss countries of operation. The gap in quality connectivity and infrastructure is expected to be Low to Medium as mobile download speed is on par with emerging market averages. A preliminary assessment suggests Moderate to Strong project outcomes rating depending on the growth in the tenancy ratio and the geographical distribution of the towers.

Market Creation - Increased competitiveness of the mobile connectivity market via competition and demonstration and replication channels, with the potential to create a competitive tower colocation market segment in the TowerCoss countries of operation. The mobile connectivity sector in these countries is fairly developed with a number of mobile operators, high technological innovation, affordability and an advanced regulatory framework. However, the tower colocation segment is nascent, limiting infrastructure sharing and efficient expansion of new technologies like 5G. By supporting the expansion of the first truly independent tower operator to further the tower colocation business model in the Western Balkans markets, the transaction could demonstrate the viability of this business model, thereby attracting new entrants or inducing other mobile network operators to further divest towers in the region, resulting in the creation of a competitive tower colocation market. Subject to the projected growth of independent towers and 5G coverage in each country beyond the TowerCoss expansion plans, and any supportive regulatory framework, a preliminary assessment suggests Strong to Very Strong market creation rating.

The Project has an Anticipated Impact Measurement and Monitoring (AIMM) rating of Good.