Safaricom Ethiopia Secures $157.4M Investment from IFC

The International Finance Corporation (IFC), the private investment arm of the World Bank Group, has announced an equity investment of $157.4 million (8.5 billion birr) in Safaricom Ethiopia.

The investment, which will give IFC a minority stake in Safaricom Ethiopia, is also supplemented by a $100 million loan and guarantees that will further support the operator’s telecommunications infrastructure development.

According to World Bank, the investment and guarantees will help Safaricom Ethiopia roll out and operate 4G and 5G mobile networks across the country. Safaricom Ethiopia also announced plans to launch its mobile money service M-PESA in 2023.

“It’s a great honor to have IFC onboard in our investment in Ethiopia. This investment is a significant sign of confidence in not only in Safariom Ethiopia, but also in Ethiopia as a prime destination for mega investments,” said Anwar Soussa, CEO of Twitter.

The guarantees issued by the Multilateral Investment Guarantee Agency (MIGA) provide 10-year guarantees amounting to $1 billion to cover the equity investments of Safaricom Ethiopia’s shareholders.

(MIGA) is a member of the World Bank Group, and its main purpose is to encourage foreign direct investment in developing countries. It does this by providing guarantees, also known as political risk insurance, to investors and lenders.

Hiroshi Matano, Executive Vice President, MIGA, underscored the value of the creation of Safaricom Ethiopia as one of the largest foreign direct investments in Ethiopia. With MIGA’s guarantee, the agency hopes to stimulate more foreign direct investment in other sectors of the Ethiopian economy.

When Ethiopia was gearing up to liberate its telecom sector in 2020, IFC advised Ethiopia’s Ministry of Finance and the Ethiopian Communications Authority in designing and tendering the nation’s first full-service telecom licenses and associated spectrum.

The license was awarded to the Global Partnership for Ethiopia BV, locally registered as Safaricom Ethiopia, in May 2021.

The international partnership that brought together the Vodafone Group, Vodacom, Safaricom, and British International Investment, saw the consortium pay $850 million in license fee payments for the Ethiopian government.

This license fee investment further reached the $1 billion mark when Safaircom Ethiopia secured a mobile money license from the National Bank of Ethiopia.

In October 2022, Safaricom said it planned to invest US$300 million a year into the country over the next ten years.