IFC and MIGA, both members of the World Bank Group, have announced their commitment to support the ongoing construction and operation of Safaricom Ethiopia’s greenfield telecom network across Ethiopia. The financial assistance includes an equity investment, a loan, and guarantees.
Under the agreement, IFC will make a $157.4 million equity investment in Global Partnership for Ethiopia BV (GPE) and provide a $100 million A-loan to its wholly owned subsidiary, Safaricom Telecom Ethiopia Plc. As a result, IFC will hold a minority position in Safaricom Ethiopia.
Mohamed Gouled, IFC Vice President of Industries, highlighted the significance of the investment, stating, “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.” The investment aims to promote equitable, high-quality internet access and improved financial inclusion, fostering a more prosperous future for Ethiopia’s economy and society.
In addition, the Multilateral Investment Guarantee Agency (MIGA) will provide 10-year guarantees worth $1 billion to cover the equity investments of Safaricom Ethiopia’s shareholders, which include Vodafone Group, Vodacom, Safaricom, and British International Investment. A portion of the guarantees, amounting to $76 million, will be provided by MIGA’s Guarantee Facility, part of the International Development Association’s Private Sector Window, in the form of a first loss layer.
Hiroshi Matano, Executive Vice President at MIGA, expressed MIGA’s enthusiasm for supporting the expansion of high-quality digital services in Ethiopia, stating, “The creation of Safaricom Ethiopia is one of the largest foreign direct investments into Ethiopia, and with this guarantee, MIGA hopes to stimulate more foreign direct investment in other sectors of the Ethiopian economy.”
These investments and guarantees will enable Safaricom Ethiopia to roll out and operate 4G and 5G mobile networks across the country, including rural and urban areas. Safaricom Ethiopia, as the first private telecom operator in Ethiopia, also plans to introduce its M-PESA financial services in 2023, following the license granted by the National Bank of Ethiopia in May 2023.
Safaricom Ethiopia officially launched its national operations on October 6, 2022, marking a significant milestone in the country’s telecom sector and paving the way for increased access to advanced digital services.