World Bank’s IFC backs Safaricom Ethiopia with US$160m
The International Finance Corporation (IFC), the World Bank’s investment arm, said it will invest US$160-million through share acquisition in Safaricom Ethiopia to support the operator’s network objectives in the East African country.
This follows a recent announcement by Safaricom Ethiopia that it has started a phased customer network rollout in Dire Dawa, to be followed by a second test in Harari region in Eastern Ethiopia, and a third test in Oromia region starting with Haramaya city – all of which is in preparation to launch countrywide operations by April 2023.
The investment gives IFC a 15.5% stake in the company, Safaricom Kenya will hold 47.1%, Japanese Sumitomo will have approximately 23%, while the UK government’s British Development Finance Corporation (CDC) will have 9.2% and South Africa’s Vodacom will have 5.2% stake in the company.
Both Safaricom Kenya and Vodacom are part of Vodafone Group. Last year, the partners together paid US$850-million for the licence in Ethiopia under the Safaricom consortium.
Safaricom Ethiopia is expected to invest US$8-billion in infrastructure and services over the next ten years.
The IFC said it will support Safaricom Ethiopia’s network rollout and achieve its targets for population and geographical coverage.
The organisation stated: “IFC’s investment will support Safaricom Telecommunications Ethiopia’s countrywide mobile network rollout and help position the company with the terms of its licence, which outlines the requirement for a specified population and geographical coverage targets and reasonable tariffs, universal accessibility and tele-density targets.”
Safaricom Ethiopia did not respond to requests for comment.
The relationship between the IFC and Safaricom Ethiopia is not new.
In July this year, Safaricom and its partners in the Ethiopian venture said they paid the IFC a transaction fee of US$4-million for services rendered to the company’s entry into the East African country.
Safaricom said the consortium hired the IFC to provide advisory services in setting up the country’s second telecommunications company in Ethiopia (Safaricom Ethiopia).