IFC, MIGA Back Safaricom Ethiopia’s Operation with Loan, Guarantees

ADDIS ABABA – IFC and MIGA – members of the World Bank Group – announced today an equity investment, a loan and guarantees to support the ongoing construction and operation of Safaricom Ethiopia’s greenfield telecom network across Ethiopia.

The 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 Telecom Ethiopia Plc.

Following the transaction, IFC will hold a minority position in Safaricom Ethiopia.

“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 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.”

Meanwhile, the Multilateral Investment Guarantee Agency (MIGA) will provide 10-year guarantees of $1 billion to cover the equity investments of Safaricom Ethiopia’s shareholders involving Vodafone Group, Vodacom, Safaricom, and British International Investment.

A portion of the MIGA guarantees, $76 million, will come from its Guarantee Facility, part of the International Development Association’s Private Sector Window, in the form of a first loss layer.

“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 at 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.”

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. The telco also plans to launch the M-PESA financial services in 2023 under a license granted in May 2023 by the National Bank of Ethiopia.

Safaricom Ethiopia officially launched its national operations on October 6, 2022, becoming the first private telecom operator in Ethiopia.