Addis Abeba – The World Bank Group’s International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) announced plans to fund the ongoing expansion of Safaricom Ethiopia’s telecom network, a landmark development expected to boost the country’s digital connectivity landscape.
The initiative aims to establish a greenfield telecommunications network that will provide affordable and reliable internet and mobile services across Ethiopia, according to the IFC’s statement.
As part of the funding agreement, IFC will make a $157.4 million equity investment in Global Partnership for Ethiopia BV (GPE) and a $100 million A-loan to its wholly owned subsidiary, Safaricom Telecommunications Ethiopia Private Limited Company (Safaricom Ethiopia).
Following the transaction, IFC will hold a minority position in Safaricom Ethiopia.
Similarly 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.
The project, in line with the Ethiopian government’s Digital Ethiopia 2025 plan, will foster the deployment of 4G and 5G mobile networks across the country, even in rural areas, with an expected outcome of significantly increasing digital access for Ethiopia’s population of approximately 120 million and improving financial inclusion upon Safaricom Ethiopia’s much anticipated launch of its flagship mobile money service M-PESA, in 2023.
Safaricom Ethiopia is a consortium named the Global Partnership for Ethiopia led by Safaricom Plc, and includes Vodafone Group, Vodacom Group, Sumitomo Corporation and British International Investment.
It was declared as the winner of one the two licenses Ethiopia opted to give to private telecommunication operators, in May 2021 after offering $850 million and promised to invest $8.5 million over 10 years. AS