Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

Business of Tech

Safaricom Ethiopia closes $257M IFC deal

Article Image
Safaricom Ethiopia has closed a deal with the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) – members of the World Bank Group – with the deal completed at a funding ceremony in Addis Ababa, Ethiopia, on Monday.

In June 2023, Safaricom announced that the IFC would become an investor in the Global Partnership for Ethiopia (GPE) consortium.

The IFC promised a $157.4 million equity investment as well as a $100 million loan and guarantees to support the ongoing construction and operation of Safaricom's greenfield telecoms network to drive digital connectivity across Ethiopia.

MIGA will provide ten-year guarantees of $1 billion to cover the equity investments of Safaricom Ethiopia's shareholders.

"The progress Safaricom Ethiopia has achieved in such a short period is nothing short of remarkable. With the highly anticipated launch of M-Pesa, we are excited to witness the profound impact it will have not only on the telecommunications landscape but also on improving financial inclusion for all people across Ethiopia," said Mohamed Gouled, vice president of industries at IFC.

Following the closure of this transaction, IFC will hold a minority equity stake in the consortium, while Safaricom PLC remains the majority shareholder. The other members of the consortium include Vodafone, Vodacom, Sumitomo Corporation and British International Investment (BII).

The consortium was created to bid for a telecoms license to operate in Ethiopia, and it was awarded that license in May 2021 as part of the Horn of Africa nation's strategy to liberalize its telecoms sector.

Safaricom said the significant investment will expedite the company's ambitious plans to provide affordable Internet and reliable connectivity across Ethiopia.

"With IFC coming on board as an equity partner, their experience in global operations and the stature of their investment brings a lot of praise and respect to the board. We look forward to their input in helping us make strides in the Ethiopian market," added Safaricom Ethiopia Chairman Michael Joseph.

Safaricom's expansion in Ethiopia

Safaricom Ethiopia began rolling out its network in August 2022, in the city of Dire Dawa in the eastern part of the country. In October 2022, it officially launched its national network in the nation's capital Addis Ababa and ten other cities.

The telco was granted a mobile money license in May 2023 and plans to launch mobile financial services by the end of the year under its profitable M-Pesa fintech platform.

Safaricom believes the IFC investment will expedite the company's plans to provide affordable Internet and reliable connectivity across Ethiopia   (Source: Allexxandar on Freepik)
Safaricom believes the IFC investment will expedite the company's plans to provide affordable Internet and reliable connectivity across Ethiopia
(Source: Allexxandar on Freepik)

Safaricom Ethiopia was the first private telecom operator in Ethiopia, ending one of the world's last telecoms monopolies.

In July 2023, Ethiopia launched a tender process for a second independent telecoms license.

Former MTN executive Wim Vanhelleputte will take over as CEO of Safaricom Ethiopia in September 2023, following the departure of Anwar Soussa at the end of July.

Related posts:

*Top image is of (seated L to R) Katsuya Kashiki, corporate officer at Sumitomo Corporation; Stanley Njoroge, interim CEO and CFO at Safaricom Ethiopia; Mohamed Gouled, vice president of industries at IFC; and Michael Joseph, Safaricom Ethiopia chairman, at the funding ceremony in Addis Ababa on August 7, 2023. (Source: Safaricom Ethiopia)

— Paula Gilbert, Editor, Connecting Africa

Innovation hub

Story

Africa can leverage GenAI for economic growth – Microsoft

A whitepaper on generative artificial intelligence (GenAI) and the future of work has found that the African continent, with its young population, can leverage AI to drive economic growth.

Registration opens for Africa Tech Festival 2024

Registration has opened for the 2024 edition of Africa Tech Festival, the continent's leading platform for technology innovators, specialists and thought leaders.

More Innovation hub

Latest video

More videos

Partner perspectives

All Partner Perspectives

Sponsored video

More videos

Follow us on X

Industry announcements

More Industry announcements

Upcoming events

Cyber Revolution Summit
August 9, 2024
Gaborone, Botswana
Africa Tech Festival 2024
November 11-14, 2024
Cape Town, South Africa
More Upcoming events

Africa Tech Perspectives

Story

Uber's Marjorie Saint-Lot on inclusion and sustainability in Africa

Uber's Country Manager for Ghana and Cote d'Ivoire, Marjorie Saint-Lot, shares how the ride-hailing company is approaching public-private partnerships, environmentally friendly initiatives and gender inclusion in Africa.

Story

The 100 most influential African leaders in 2023

A new report from Africa Tech Festival and Connecting Africa puts a spotlight on the top 100 African leaders in the telecoms and technology sector in 2023.

Story

Deep dive into East Africa's tech startup ecosystem

New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.

More Africa Tech perspectives

Guest Perspectives

Story

How e-mobility could transform Africa's transport sector

By Francis Hook

ICT analyst Francis Hook delves into Africa's e-mobility sector and unpacks the challenges faced locally and the benefits the move to electric vehicles could bring to urban transport systems.

Story

Omdia View: April 2024

By Omdia Analysts

April 2024's telecoms highlights in the Middle East and Africa included a license for Starlink in Ghana, new mobile termination rates in Ethiopia, and 6G trials in Bahrain – that and more in the latest Omdia View.

More Guest Perspectives

Like us on Facebook

Newsletter Sign Up


Sign Up
Tag id test-002