Ethio Telecom in financing talks with AfDBEthio Telecom in financing talks with AfDB

State-owned Ethio Telecom has initiated strategic discussions with the African Development Bank (AfDB) to help advance Ethiopia's digital transformation strategy and enhance Africa's broader digital economy.

Representatives from both sides participated in a high-level meeting discussing initiatives to expand digital infrastructure, enhance rural connectivity and foster innovation in fintech and cloud services.

Ethio Telecom CEO Frehiwot Tamru made the case for the telco's digital transformation vision, highlighting a strategic roadmap and commitment to invest US$1.1 billion towards telecom and digital infrastructure expansion.

Tamru said she believed that Ethio Telecom's digital transformation will drive Ethiopia's digital evolution and serve as a broader catalyst for Africa's digital empowerment.

The AfDB commended Ethio Telecom's efforts to bridge the digital divide and reaffirmed its support for Ethio Telecom's investment plan.

Ethio Telecom's privatization plans

The financing discussions follow reports that Ethio Telecom's first sale of shares, to kick off its partial privatization process and raise funds to roll out its 5G network, has been delayed.

At the beginning of 2025, Ethio Telecom's executives announced a five-week extension of the deadline for a public offering of a 10% stake in the company, saying that the offer would now run until February 14, 2025.

Related:Ethiopia's telecoms liberalization makes progress – Omdia

In October 2024, Ethio Telecom began offering equity in the company, placing 100 million ordinary shares on sale at a par value of 300 Ethiopian Birr (US$2.39) each.

Prospective investors are required to purchase a minimum of 33 shares, with a maximum limit of 3,333 shares, valued at nearly 1 million Birr ($7,980).

Buyers are also subject to a 1.5% service fee and a 15% value-added tax (VAT). The shares are available for purchase on Telebirr, the telco's mobile money platform.

Ethio Telecom has initiated strategic discussions with the AfDB to finance its digital transformation initiatives. (Source: Allexxandar on Freepik)

Ethio Telecom's privatization journey began in June 2021, when the Ethiopian government opened the tendering process to private investors for a 40% stake in the operator.

Although French operator Orange initially showed interest, privatization plans were paused in March 2022 and relaunched in November 2022.

In February 2023, Ethiopia's government decided to sell a bigger portion of Ethio Telecom, upping the stake offered from 40% to 45%. However, for now, the company is only selling a 10% stake.

In November 2023, Orange decided against purchasing a minority stake in the company.

Despite these challenges, Ethio Telecom launched 5G services in September 2023.