World Bank completes investment into Safaricom Ethiopia

Details: Manny Pham; Category: Operators; 12 June 2023; 8040 views

Two World Bank members revealed plans to invest in Safaricom Ethiopia, intending to invest US$157.4 million in the operator’s parent company and loan the operator US$100 million, to enable expansion plans.

The World Bank stated that its International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) will provide financial support.

The IFC will make the US$157.4 million equity investment in Global Partnership for Ethiopia BV (GPE) and the $100 million A-loan to its wholly owned subsidiary, Safaricom Telecommunications Ethiopia Private Limited Company (Safaricom Ethiopia). After the transaction, the IFC will hold a minority position in Safaricom Ethiopia.

MIGA will provide a 10-year guarantee of US$1 billion to cover investments to cover the equity investments of Safaricom Ethiopia's shareholders: Vodafone Group, Vodacom, Safaricom, and British International Investment.

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. Young people, small businesses, and entrepreneurs will particularly benefit from improved access to high-quality digital services such as mobile financial services."

He added: “The Ethiopian telecommunications market — as well as the country's economy and society — will benefit substantially from equitable, high-quality internet access and improved financial inclusion, advancing the country on a path to a more prosperous future."

Safaricom Ethiopia launched services in 2022 and became the first private operator in Ethiopia to rival state-owned operator Ethio Telecom.

The Ethiopian government is hunting for a third operator this year and offered a stake in Ethio Telecom to attract more international interest.

At MWC Barcelona this year, Ethio Telecom chief executive Frehiwot Tamru was bullish on the operator's charge to remain the market leader despite new competition.