Liberty Costa Rica secures US$450mn to finance investments in mobile networks and fiber optics

IDB Invest and Liberty Costa Rica, part of Liberty Latin America, announced the international issuance of a sustainability-linked bond as part of a US$450mn financing package, the multilateral said in a statement.

Proceeds from the bond will be used to finance investments in fiber optic and mobile infrastructure.

Liberty Costa Rica, which emerged after the acquisition of Telefónica’s operation in the country, will work on the migration of users from 2G and 3G to 4G and the extension of LTE networks in rural areas. In addition, the financing will be used to double the size of the fiber optic network and begin to outline the future 5G network.

The financing will be made in two tranches. The first consists of a US$50mn senior A loan, complemented by a US$400mn B tranche for an eight-year term. It will be provided by a special purpose entity that acted as a participant in the IDB Invest line.

Liberty Costa Rica committed to sustainability performance goals to cover a reduction of more than 30% in absolute emissions of direct and indirect scope and a reduction of more than 35% in the intensity of GHG emissions per operating unit, IDB Invest said.

Last year, Liberty Latin America announced that it was studying its emissions footprint as part of plans to achieve carbon neutrality.

At the time, the company mentioned that in Costa Rica it had already defined the reduction of scope 1 and 2 emissions by 30%, and those of scope 3 by 35% by 2027. Most of the energy in Costa Rica comes from renewable sources.

Since its arrival in Costa Rica, Liberty has increased competition in the mobile market. According to the latest data from regulator Sutel, at the end of 2021 the company increased its market share from 38.6% in 2020 to 42.3%, followed by state-owned ICE (38.6%) and Claro.

In the fixed segment, Liberty ranks second in market share with 23.5%. The company, which operates in the fixed market after the acquisition of Cabletica, has a hybrid HFC network that is seeking to migrate to fiber optics.