The International Finance Corporation (IFC) has announced a $257.4 million (KSh35.88 billion) debt and equity injection in Safaricom Ethiopia.
The funding will support the ongoing construction and operation of Safaricom Ethiopia’s greenfield telecommunications network across Ethiopia, leading to more affordable internet, reliable mobile connectivity, and technology access for people and businesses in the country.
According to the IFC, $157.4 million has been injected as an equity investment, while the remaining $100 million is a loan.
.@WorldBank will make one of its largest investments into Africa to support @SafaricomET’s groundbreaking roll-out of 4G and 5G networks and services in Ethiopia. @IFC will invest US$157.4m in the Global Partnership for Ethiopia and become a minority shareholder.
— Vodafone Group (@VodafoneGroup) June 9, 2023
The IFC hopes that through this investment, it can help Safaricom Ethiopia create a competitive market for mobile connectivity and reduce costs for consumers.
“Through this investment, we hope to help the company create a competitive market for mobile connectivity, reflecting our strategy to increase competition in the digital sector globally and reduce costs for consumers,” said Mohamed Gouled, IFC vice-president of industries.
The Multilateral Investment Guarantee Agency (MIGA) will provide 10-year guarantees of $1 billion to cover the equity investments of Safaricom Ethiopia’s shareholders: Vodafone Group, Vodacom, Safaricom, and British International Investment.
A portion of the MIGA guarantees, $76 million, will come from the MIGA Guarantee Facility, part of the International Development Association’s Private Sector Window, in the form of a first loss layer.
‘With this guarantee, Miga hopes to stimulate more foreign direct investment in other sectors of the Ethiopian economy,” said Hiroshi Matano, executive vice president at Miga.
Under a license granted in May 2023 by the Central Bank of Ethiopia, Safaricom Ethiopia plans to launch financial services in 2023 under the brand name M-PESA.
“The equity investment by IFC and the 10-year guarantees of $1 billion by MIGA is a show of confidence in Ethiopia as a viable growth market as well as in our business,’’ said Safaricom chief executive Peter Ndegwa.
Global Partnership for Ethiopia, (a consortium comprising @SafaricomPLC, @Vodacom, @VodafoneGroup, Sumitomo Corporation & @BritishIntInv (formerly CDC Group) has added @IFC_org as a shareholder to Safaricom Ethiopia.#FurtherAheadTogether pic.twitter.com/ig9ftGhYBg
— Safaricom Ethiopia (@SafaricomET) June 9, 2023
