IFC invests $157M in Safaricom consortium in Ethiopia

Safaricom has welcomed another investor to its consortium in Ethiopia, with the International Finance Corporation (IFC) joining as a minority shareholder through a $157.4 million equity investment in The Global Partnership for Ethiopia and a $100 million loan to its wholly owned subsidiary, Safaricom Telecommunications Ethiopia.

The Global Partnership for Ethiopia is a consortium comprising of Vodacom Group, Vodafone Group, Safaricom, Sumitomo Corporation – one of the largest international trading and business investment companies, and British International Investment (BII) – the UK's development finance institution and impact investor.

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 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.

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

Telecoms market liberalization is a key part of the Ethiopian government's Digital Ethiopia 2025 plan to help the country realize its digital potential, leverage technology to build a more prosperous society and help meet the country's United Nations Sustainable Development Goal commitments.

Now the consortium adds World Bank Group members IFC and MIGA (Multilateral Investment Guarantee Agency) as a way to support the ongoing construction and operation of Safaricom Ethiopia's greenfield telecommunications network across Ethiopia.

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

Investment to strengthen network operations

Safaricom Ethiopia CEO Anwar Soussa said the additional investment from the IFC will strengthen its ability to roll out modern, high-speed Internet services across Ethiopia.

Ethiopia is Africa's second-most populous country, with a population of approximately 120 million. 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.

Safaricom Ethiopia CEO Anwar Soussa signs paperwork as part of the IFC's investment into the Global Partnership for Ethiopia's consortium. (Source: Safaricom Ethiopia)

Furthermore, under a mobile money license granted in May 2023 by the Central Bank of Ethiopia, Safaricom Ethiopia also plans to launch mobile financial services in 2023 under its profitable M-Pesa fintech platform.

"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.

"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," Gouled added.

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*Top image is of The Global Partnership for Ethiopia's consortium members welcoming new investor the IFC. (Source: Safaricom Ethiopia)

— Paula Gilbert, Editor, Connecting Africa