World Bank pledges support for Safaricom Ethiopia

Addis Ababa, June 9, 2023 (FBC) – International Finance Cooperation (IFC) and Multilateral Investment Guarantee Agency (MIGA), members of the World Bank Group — today announced an equity investment, a loan and guarantees to support the ongoing construction and operation of Safaricom Ethiopia’s greenfield telecommunications network across Ethiopia, leading to more affordable internet, reliable mobile connectivity and technology access for people and businesses in the country.

This first partnership between IFC, MIGA, Vodafone, Vodacom, Safaricom, Sumitomo Corporation, and British International Investment in Ethiopia addresses the World Bank Group’s core mandate to help countries end poverty and meet their citizens’ demands for services including digital connectivity.

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.

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 investment and guarantees are said to help Safaricom Ethiopia roll out and operate 4G and 5G mobile networks across the country – including in rural and urban areas.

Furthermore, under a license granted in May 2023 by the Central Bank of Ethiopia, Safaricom Ethiopia also plans to launch financial services in 2023 under the brand name M-PESA, it is stated.

“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. 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,” said Mohamed Gouled, IFC Vice President of Industries.