Financing Yemen’s Digital Reconstruction: What Would Make It Investable?

Financing Yemen’s Digital Reconstruction: What Would Make It Investable?

Executive summary

Yemen’s digital reconstruction will require billions of dollars of investment over time, but the central challenge is not simply finding enough money.

It is creating projects in which the risks, revenues, ownership and public benefits are sufficiently clear for the right type of capital to participate.

Telecommunications reconstruction is often presented as a single national funding requirement. In practice, it contains very different investment propositions:

• Profitable urban mobile-network expansion

• Shared national fibre and international connectivity

• Renewable power for telecom sites

• Rural and remote coverage

• Government and public-service connectivity

• Digital-payment infrastructure

• Data centres and cloud services

• Emergency and critical-infrastructure resilience

• Regulatory and institutional capacity

Some of these projects should be funded commercially. Others could become commercially viable if risks are reduced through guarantees, infrastructure sharing, anchor customers or concessional finance. Some will require direct public or donor funding because their social value is much greater than their potential financial return.

Treating all projects as commercial would leave essential services unfunded. Treating everything as aid would displace private capital, weaken financial discipline and create infrastructure that may not be sustainable once donor support ends.

Yemen therefore needs a sequenced digital reconstruction portfolio, divided into four investment categories:

1. Commercially financeable projects

2. Commercial projects requiring risk reduction

3. Blended-finance and viability-gap projects

4. Public and donor-funded digital infrastructure

Each project should be tested against a common investment-readiness framework covering:

• Legal and operating authority

• Ownership and access to assets

• Revenue visibility

• Currency and payment risk

• Technical feasibility

• Security and continuity

• Procurement integrity

• Environmental and social impact

• Governance

• Maintenance and lifecycle funding

• Measurable economic and public benefit

The wider economic environment remains extremely difficult. The World Bank reported in May 2026 that Yemen’s economy had contracted again in 2025 and continued to face pressure from regional conflict. Its earlier analysis found that real GDP per person had fallen by 58% since 2015, while inflation in areas controlled by the internationally recognised government exceeded 30% in 2024.

These conditions make conventional project finance difficult. They do not make investment impossible.

The World Bank Group’s new Yemen Country Partnership Framework for FY2026–30 explicitly seeks to create conditions in which the Yemeni private sector can grow and attract investment. Its priorities include expanding electricity access and strengthening sectors such as agribusiness, mariculture and fisheries—all of which require dependable connectivity. World Bank Yemen Country Partnership Framework

Digital infrastructure should be positioned as a cross-cutting enabler of these wider objectives.

The objective is not to produce one grand national reconstruction plan seeking full funding from a small number of international donors. It is to create a pipeline of credible, appropriately sized projects that different investors and institutions can understand, finance and monitor.

Yemen needs projects, not just a funding target

A large headline estimate of the amount required to rebuild Yemen’s communications sector may attract political attention, but it does not tell an investor what can actually be financed.

Investors do not fund abstract national needs. They fund defined assets, companies, contracts and cash flows.

They need to know:

• What is being built or acquired?

• Who owns it?

• Who has the authority to approve it?

• Who will use it?

• Who will pay?

• In which currency?

• What happens if an authority, tariff or licence changes?

• Can equipment be imported?

• Can revenues be transferred?

• Who maintains the asset?

• What remedies exist if contractual obligations are not met?

Yemen’s political and institutional fragmentation makes these questions unusually difficult.

A licence may be recognised in one area but disputed in another. A backbone route may cross several centres of control. A public institution may sign a long-term contract but lack dependable budget funding. Revenues may be earned in Yemeni rials while equipment, software and debt must be paid for in US dollars or another hard currency.

The first investment requirement is therefore not capital.

It is project preparation.

Potential investments must be converted from broad policy ambitions into propositions with defined scope, verified assets, realistic demand, appropriate risk allocation and credible delivery arrangements.

Without this preparation, reconstruction funding will either remain undeployed or be directed towards politically visible projects that are not operationally sustainable.

Not all digital infrastructure should be financed in the same way

A useful national portfolio should divide projects according to their capacity to generate financial returns.

Category one: commercially financeable projects

Some investments should be capable of attracting operator, corporate or private infrastructure capital without direct public subsidy.

Possible examples include:

• Mobile capacity expansion in major cities

• Upgrading congested sites to effective 4G

• Enterprise fibre in commercial districts

• Connectivity for ports and major logistics facilities

• Data-centre services backed by contracted demand

• Digital-payment and merchant-service platforms

• Solar conversion at high-cost diesel sites

• Infrastructure sharing in areas with several operator tenants

• International capacity serving established traffic

• Commercial satellite distribution and managed services

These projects should be funded commercially where possible.

Public bodies can improve the environment through licensing clarity, spectrum availability, rights of way, infrastructure access and predictable taxation. But scarce donor grants should not finance investments that can produce competitive private returns.

Direct subsidy in these areas could distort the market and reward incumbent operators for investments they should make themselves.

However, commercially attractive does not mean risk-free.

An operator may still need confidence that it can import equipment, renew licences, access sites and retain sufficient revenue to recover its investment. A data-centre project may require secure power and anchor contracts. A tower company needs enforceable tenant agreements.

The public role is to reduce avoidable policy and institutional uncertainty—not guarantee commercial success.

Category two: commercial projects requiring risk reduction

Other projects may generate adequate long-term revenue but remain unfinanceable because investors cannot carry specific political, regulatory or currency risks.

Examples could include:

• Open-access national fibre routes

• New international cable landing or backhaul infrastructure

• Large tower portfolios

• Regional data centres

• Renewable energy-as-a-service for mobile sites

• Mobile expansion into secondary cities

• Shared infrastructure across divided areas

• Government cloud and managed-connectivity contracts

• Major wholesale network modernisation

These projects may require:

• Political-risk insurance

• Partial-risk guarantees

• Credit enhancement

• Minimum-revenue arrangements

• Anchor-tenancy contracts

• Currency-risk mechanisms

• Escrow arrangements

• Concessional debt

• First-loss protection

• Independent contract supervision

The objective is not to remove every risk from the investor.

It is to allocate each risk to the party best able to manage it.

An operator can manage technology choice, network performance and customer acquisition. It cannot control whether a public authority unexpectedly cancels its licence or prevents access to infrastructure.

A government can influence licensing and rights of way. It cannot reasonably guarantee all retail demand.

A development-finance institution may be able to absorb longer repayment periods or provide political-risk cover. It should not be expected to operate the network.

Clear allocation reduces the project’s cost of capital and limits disputes after construction begins.

Category three: blended-finance and viability-gap projects

Some projects produce revenue but not enough to justify the full cost and risk of commercial investment.

Rural mobile coverage is a clear example.

A remote district may generate some subscriber and merchant revenue, but not enough to finance towers, backhaul, solar power, maintenance and security at normal commercial return thresholds.

The public benefit may nevertheless be substantial because the network connects:

• Schools

• Clinics

• Farmers

• Fishing communities

• Government services

• Payment and remittance agents

• Emergency responders

• Local businesses

These projects can be supported through blended finance.

Possible mechanisms include:

• Capital grants combined with private investment

• Competitive viability-gap subsidies

• Concessional loans

• Results-based payments

• Public anchor-tenancy commitments

• Universal-service funding

• Donor support for school and clinic connections

• Guarantees covering defined political risks

• Bundling stronger and weaker locations into one portfolio

The subsidy should cover the efficient viability gap rather than the full project cost.

Providers should contribute capital, operate the infrastructure and carry agreed performance risk. Public payments should be linked to verified coverage, availability, affordability and continued service.

This preserves commercial discipline while recognising that the project creates social and economic benefits that the operator cannot capture entirely through tariffs.

Category four: public and donor-funded infrastructure

Some digital capabilities are public goods or essential government functions and are unlikely to produce conventional commercial returns.

Examples may include:

• Emergency communications

• National cyber-incident coordination

• Regulatory systems

• Spectrum monitoring

• National infrastructure and coverage mapping

• Connectivity for the smallest or most isolated communities

• Government interoperability platforms

• Public-interest data systems

• Technical assistance and institutional capability

• Disaster-recovery facilities

• Digital inclusion for particularly vulnerable groups

These projects may need direct government, donor or development-agency funding.

Even then, they require commercial and operational discipline.

A grant does not remove the need to determine:

• Ownership

• Governance

• Maintenance

• Software licensing

• Cybersecurity

• Staffing

• Equipment replacement

• Operating expenditure

• Data responsibility

• Service continuity

Donor-funded infrastructure frequently fails when projects finance initial deployment but not the people, power, licences and maintenance required afterwards.

No asset should be commissioned without a credible lifecycle plan.

What makes a project investable?

Investment readiness is not determined solely by expected financial return.

In Yemen, a financially attractive project may remain uninvestable if rights, revenues and operating responsibilities are unclear.

A common assessment framework should examine ten dimensions.

1. Legal authority

The investor needs to know which institution has the authority to approve, license and supervise the project.

Where authority is contested, the project may require:

• Recognition by more than one institution

• A limited sector continuity agreement

• External legal review

• Defined geographic scope

• Contractual protections against institutional change

• A transitional recognition mechanism

Legal documentation should acknowledge the political reality rather than assume that uncertainty does not exist.

2. Asset ownership and access

A project depending on existing towers, fibre, land, ducts, buildings or cable landing facilities must verify who owns and controls those assets.

Legal title alone may be insufficient if another organisation exercises operational control.

Due diligence should cover:

• Ownership records

• Current possession and control

• Existing leases

• Security interests

• Competing claims

• Physical condition

• Access rights

• Associated contracts

• Historical liabilities

Investors need confidence that they can use and maintain the asset throughout the investment period.

3. Revenue visibility

A credible project needs realistic demand and payment assumptions.

Potential revenue may come from:

• Retail subscribers

• Wholesale operators

• Enterprise customers

• Government agencies

• Development organisations

• Schools and clinics

• Merchants and payment providers

• International capacity customers

Forecasts should be based on verified affordability and use—not simply population within theoretical coverage.

Where government is an anchor customer, the project must identify which budget or donor programme funds the contract and how payment will continue.

4. Currency and repatriation

Telecommunications projects typically purchase equipment, software, satellite capacity and specialist services in foreign currency.

Revenue may be earned locally.

Currency depreciation can therefore make an otherwise successful project unable to meet its external obligations.

Possible protections include:

• Partial indexation

• Hard-currency revenue from international customers

• Foreign-currency reserve accounts

• Currency hedging where available

• Development-finance mechanisms

• Tariff-adjustment provisions

• Matching local expenditure to local revenue

• Staged rather than fully imported deployment

The treatment of dividends, debt service and capital repatriation must also be clear.

No financial model should assume a stable exchange rate without stress testing.

5. Technical suitability

The project should use technology appropriate to Yemen’s needs, environment and maintenance capability.

Due diligence should test:

• Demand and capacity

• Coverage

• Backhaul

• Spectrum

• Power

• Heat and dust performance

• Vendor support

• Interoperability

• Cybersecurity

• Spare parts

• Upgrade path

• Total lifecycle cost

The newest technology is not necessarily the most investable.

Reliable 4G with strong backhaul may produce better returns and public value than a prestige-led 5G deployment. A shared microwave route may be preferable to fibre where civil works are unsafe. Satellite may connect a remote area rapidly but remain too expensive for long-term mass-market use.

6. Security and continuity

Investors need to understand both physical and operational security.

The assessment should cover:

• Site access

• Theft and vandalism

• Conflict exposure

• Staff safety

• Route diversity

• Cyber threats

• Supply interruption

• Emergency operating procedures

• Insurance

• Alternative management arrangements

Security should not be treated as a single national risk premium. Conditions differ significantly by location and project type.

A well-designed project can reduce exposure through distributed infrastructure, remote monitoring, local maintenance, redundancy and phased deployment.

7. Procurement integrity

Investors and development institutions will be cautious where procurement decisions are opaque or vulnerable to political influence.

A credible process requires:

• Published requirements

• Objective evaluation

• Beneficial-ownership disclosure

• Conflict-of-interest controls

• Independent technical review

• Transparent contract awards

• Change-control mechanisms

• Audit rights

• Performance-based payments

Procurement should also resist artificially low bids followed by expensive changes. Whole-life cost, delivery capability and maintenance support matter more than the lowest initial price.

8. Governance

Each project needs clear decision rights and accountability.

Governance should identify:

• Asset owner

• Network or service operator

• Contracting authority

• Regulator

• Lenders and investors

• Technical supervisor

• Performance verifier

• Dispute-resolution mechanism

A special-purpose project company may help separate the asset, revenues and obligations from wider institutional disputes.

But creating a company does not itself create governance. Board composition, reserved decisions, reporting, audit and related-party transactions still require attention.

9. Environmental and social impact

Digital infrastructure generally creates positive development outcomes, but individual projects can still create harm.

Relevant issues include:

• Land acquisition

• Community consultation

• Construction impacts

• Energy use

• Diesel and battery handling

• Electronic waste

• Worker safety

• Data privacy

• Surveillance risk

• Exclusion of vulnerable groups

• Affordability

Environmental and social safeguards should improve project quality without producing approval requirements disproportionate to the investment.

10. Lifecycle sustainability

The investor and public sponsor must understand what happens after initial construction.

The project needs funding for:

• Operations

• Power

• Software

• Spectrum and licence fees

• Security

• Maintenance

• Spares

• Battery replacement

• Technology upgrades

• Staff capability

• Insurance

• Decommissioning

A five-year donor-funded project should not create an asset with a ten-year technical life but no operating budget after year five.

The role of different capital providers

Yemen will need several types of capital, each used for the right purpose.

Yemeni operators and businesses

Domestic companies understand customers, operating conditions and local relationships. They should lead commercially viable service and network investments where possible.

But their balance sheets and access to foreign currency may be constrained. Partnerships with vendors, infrastructure investors and development institutions can extend their capacity.

Regional strategic investors

Telecommunications operators, tower companies, fibre investors, energy providers, satellite distributors and data-centre businesses from the Gulf and wider region may bring capital, technology and operational expertise.

Their participation could be particularly valuable where projects connect Yemen with regional networks, ports, cables, payments and cloud ecosystems.

However, investment should not become a vehicle for political control or the creation of exclusive infrastructure bottlenecks.

Vendors

Equipment suppliers can provide deferred payment, managed services, leasing or vendor finance.

This can accelerate deployment, but it creates concentration and lock-in risks. Contracts should preserve interoperability, access to performance data and the ability to change suppliers over time.

Vendor finance is still debt. It should not conceal an unaffordable project.

Development-finance institutions

DFIs can provide long-term debt, guarantees, political-risk cover and investment standards that conventional commercial lenders may not offer.

Their involvement can improve project governance and attract additional private capital.

However, projects must still demonstrate realistic revenue, local capability and development impact.

Donors and international agencies

Grant funding should concentrate on:

• Project preparation

• Institutional capability

• Public goods

• Inclusion

• Viability gaps

• Demonstration projects

• Independent verification

• Emergency and humanitarian requirements

Grants should be designed to mobilise sustainable investment rather than fund indefinitely parallel systems.

Diaspora capital

Yemen’s diaspora has financial resources, local relationships and a direct interest in economic recovery.

Potential mechanisms might include:

• Regulated investment funds

• Diaspora bonds at a later stage

• SME and fintech investment vehicles

• Co-investment platforms

• Project-specific notes

• Remittance-linked savings or investment products

Trust, governance and investor protection would be crucial. Appeals to patriotism cannot substitute for credible structures and reporting.

Create a digital reconstruction project-preparation facility

Yemen’s largest immediate gap may be the capacity to turn priorities into financeable projects.

A dedicated project-preparation facility could support:

• Infrastructure mapping

• Demand analysis

• Technical feasibility

• Legal due diligence

• Environmental and social assessment

• Financial modelling

• Transaction structure

• Procurement design

• Market engagement

• Risk allocation

• Independent review

The facility should not become another permanent bureaucracy or a substitute for Yemeni institutions.

It should be a small, expert capability that helps sponsors prepare projects to standards acceptable to operators, investors, donors and DFIs.

The pipeline should be published at an appropriate level, showing:

• Project purpose

• Location

• Sponsor

• Delivery model

• Estimated capital need

• Expected revenue

• Required public support

• Development outcomes

• Preparation status

• Procurement timeline

This would allow potential investors to engage before projects reach formal tender.

Use pilots to reduce uncertainty

In fragile markets, a successful pilot is valuable not because it proves that the technology works, but because it reveals operating reality.

A pilot can generate evidence about:

• Customer demand

• Willingness to pay

• Equipment performance

• Power cost

• Site access

• Maintenance

• Local partnerships

• Regulatory cooperation

• Security

• Payment collection

• Public-service use

Pilots should be designed with scale in mind.

They need defined success criteria, independent measurement and a route into larger procurement or investment. A demonstration that ends when grant funding expires creates little lasting value.

Representative pilots might include:

• A solar-powered rural neutral-host network

• An open-access fibre corridor

• A satellite-backed community-connectivity portfolio

• A digital-payment and merchant ecosystem

• Resilient connectivity for a port or logistics zone

• A shared emergency communications platform

Each should test the commercial and governance model as rigorously as the technology.

Sequence investment to build confidence

Yemen should not begin with the largest and most politically complex projects.

Early investments should be selected for their ability to demonstrate:

• Revenue collection

• Contract enforcement

• Open access

• Reliable operation

• Transparent procurement

• Measurable public benefit

• Cooperation between institutions

• Successful private participation

A practical sequence could be:

Stage one: repair and efficiency

• Restore high-value existing assets

• Reduce diesel dependence

• Improve network monitoring

• Upgrade congested 4G capacity

• Strengthen international-route resilience

• Connect priority public institutions

These investments can produce visible improvements quickly.

Stage two: shared infrastructure

• Develop neutral-host rural portfolios

• Expand open-access backbone capacity

• Create shared energy systems

• Connect economic corridors

• Strengthen payment infrastructure

• Aggregate government demand

This reduces duplication and expands service reach.

Stage three: strategic expansion

• Add international routes

• Develop data centres and cloud services

• Expand fibre access

• Introduce targeted 5G

• Scale rural coverage

• Integrate advanced satellite and HAPS capabilities where viable

Larger projects become more credible after the market demonstrates that earlier investments can be governed and operated successfully.

Conditions should accompany reconstruction finance

Public and development finance should not be unconditional.

Funding should support reforms and behaviours that improve the entire market.

Possible conditions include:

• Open wholesale access

• Infrastructure sharing

• Transparent procurement

• Publication of service-quality data

• Independent financial audit

• Protection of customer funds and data

• Competitive neutrality

• Coverage and affordability commitments

• Local skills development

• Lifecycle maintenance

• Defined environmental safeguards

• Cooperation with national asset and spectrum registers

Conditions should be proportionate and enforceable.

A long list of requirements that cannot be monitored creates bureaucracy rather than accountability.

What should be avoided

One national megaproject

A single master contract would concentrate political, financial and delivery risk while limiting competition.

Funding technology without resolving access rights

New equipment cannot compensate for disputed control of sites, fibre or spectrum.

Donor substitution for commercial capital

Grants should not pay for profitable urban investments that operators can finance.

Commercial expectations for public goods

Emergency communications and the smallest rural locations may never produce conventional investor returns.

Sovereign guarantees for every project

Guarantees create contingent public liabilities and should be used selectively.

Exclusive deals with strategic investors

Capital should not be exchanged for permanent control over gateways, backbones or national data.

Optimistic foreign-exchange assumptions

Currency mismatch can destroy an otherwise viable project.

Procurement based on lowest initial price

The relevant measure is reliable service over the full asset life.

Infrastructure without institutions

Networks need regulation, contract management, cybersecurity, engineering capability and financial governance.

Waiting for perfect political conditions

Some national questions cannot be resolved immediately. Carefully structured local, regional and technically interoperable projects can still proceed.

The boardroom and investment questions

Senior decision-makers should ask:

• Which investment category does the project belong in?

• Is public funding genuinely required?

• What risk prevents commercial finance?

• Can that risk be reduced rather than subsidised?

• Who owns and controls the relevant assets?

• Is the operating authority recognised?

• Who pays for the service?

• In which currency is revenue earned?

• How will foreign-currency obligations be met?

• What happens if tariffs, licences or institutions change?

• Is demand verified or assumed?

• Can the project be divided into investable phases?

• Does it create an infrastructure bottleneck?

• Will competitors receive fair access?

• Who verifies construction and performance?

• What happens after donor funding ends?

• Are maintenance and upgrades included in the financial model?

• What measurable economic and social outcomes will result?

• Can the project attract additional capital after proving the model?

If these questions cannot be answered, the project is not yet investment-ready.

Conclusion: build an investment pipeline, not a reconstruction wish list

Yemen’s digital reconstruction cannot depend on one donor conference, one strategic investor or one national procurement.

Nor should it wait until every political and institutional question has been resolved.

The more credible approach is to create a portfolio of projects that can move at different speeds and use different forms of capital.

Profitable urban networks, enterprise services, digital payments and high-value efficiency programmes should attract commercial investment. Shared backbones, tower portfolios and renewable energy may need guarantees, anchor customers or concessional debt. Rural coverage and public-service connectivity may require blended finance. Cybersecurity, emergency systems and institutional capability will often need direct public or donor support.

This segmentation is important because it prevents two costly mistakes: using grants where private investment is possible and expecting private investors to finance services whose benefits cannot be captured commercially.

The central task is to turn need into investability.

That means defining assets, verifying ownership, identifying customers, allocating risks, protecting revenues, designing credible governance and funding operations across the entire asset lifecycle.

Project preparation is therefore as important as project finance.

If Yemen can create a visible pipeline of well-structured investments, early successes can begin to reduce perceived risk. Working networks, honoured contracts, transparent procurement and reliable revenue collection will do more to attract subsequent capital than promotional claims about market potential.

Digital infrastructure can also support the wider investment priorities identified by the World Bank Group: electricity, livelihoods, agribusiness, mariculture, fisheries and women’s economic participation. It is not a standalone sector. It is part of the enabling infrastructure through which these parts of the economy can become more productive, connected and investable.

The measure of success will not be the total funding pledged.

It will be the value of infrastructure still delivering useful, affordable and reliable services years after the reconstruction programme begins.

How Bridge Connect can help: Bridge Connect can support governments, operators, investors, development institutions and strategic partners in converting Yemen’s digital priorities into an actionable investment portfolio. This could include country and market assessment, project segmentation, investment-readiness reviews, commercial and operating-model design, infrastructure and stakeholder mapping, partner identification, market engagement, risk assessment, project sequencing and the development of board-level country packs and investable reconstruction programmes.

This is Part 6 and the concluding article in the Bridge Connect Insight series, Yemen’s Digital Reconstruction. The series has examined institutional reunification, future connectivity architecture, telecom energy, digital commerce, rural inclusion and the financing required to turn these priorities into a sustainable national reconstruction programme.