The International Finance Corporation (IFC) will invest Sh21.93 billion ($157.4 million) in an equity investment in Safaricom Ethiopia’s special purpose vehicle, Ethiopia BV (GPE).
The World Bank’s private financer has also committed Sh13.93 billion ($100 million) in A-loan to Safaricom Ethiopia, meaning the firm will hold a minority position in the telco.
“IFC is delighted to announce its support to Safaricom Ethiopia, the first private sector-led telecoms operator in the country, and its parent company the Global Partnership for Ethiopia,” IFC Vice President of Industries Mohamed Gouled said.
“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,” Gouled added.
“Young people, small businesses, and entrepreneurs will particularly benefit from improved access to high-quality digital services such as mobile financial services.”
Similarly, the Multilateral Investment Guarantee Agency (MIGA) will provide 10-year guarantees of Sh139.5 billion ($1 billion) to cover the equity investments of Safaricom Ethiopia’s shareholders, including Vodafone Group, Vodacom, Safaricom, and British International Investment.
A portion of the MIGA guarantees, worth Sh10.59 billion ($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.
The investment and guarantees will help Safaricom Ethiopia roll out and operate 4G and 5G mobile networks across the country, including in rural and urban areas.
“MIGA is pleased to help people in all regions of Ethiopia, as the country increases access to high-quality digital services,” said Hiroshi Matano, Executive Vice President, MIGA.
“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.”
On his part, Safaricom Ethiopia Chairman Michael Joseph said Ethiopia has a large, young, and entrepreneurial population that can unlock the country’s economic potential as they advance digitalization.
“It is great to have the World Bank units with us as part of the international funding coalition behind Safaricom Ethiopia,” said Joseph.