Safaricom Ethiopia will receive $257.4 million (KSh36.8 billion) in funding from the World Bank Group to support the telco’s greenfield telecommunications projects. This move will increase Ethiopia’s mobile connectivity.
The funding will come in equity investments, a loan, and guarantees through the World Bank Group’s private investment arm: International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA).
Initially announced in June 2023, the IFC and the consortium finalised the agreement on August 7, 2023.
The funding agreement calls for the IFC to lend the consortium $100 million (Sh14.3 billion) and to invest $157.4 million (KSh22.5 billion) in Global Partnership for Ethiopia BV (GPE) to support the greenfield projects.
Consequently, IFC will own a minority stake in Global Partnership for Ethiopia BV (GPE), while Safaricom PLC will be the majority shareholder.
For context, the consortium, also known as the Global Partnership for Ethiopia BV (GPE), includes Vodafone, Vodacom, Sumitomo Corporation, and British International Investment (BII).
“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,” Safaricom Ethiopia Chairman, Michael Joseph, said.
Additionally, MIGA will offer 10-year guarantees worth $1 billion (KSh143.1 billion) to cover the equity investments made by Safaricom Ethiopia’s shareholders.
Besides, the MIGA Guarantee Facility will contribute $76 million (KSh10.9 billion) towards the MIGA guarantees.
What’s more, in May 2023, Safaricom's mobile money service, M-Pesa, received a licence to launch the service in Ethiopia. Thus, M-Pesa will reportedly launch in the third quarter of the financial year 2023/24.