Safaricom is set to provide more affordable internet, reliable mobile connectivity and technology access for people and businesses in Ethiopia.

This after World Bank, through its members IFC and MIGA, announced an equity investment, a loan and guarantees to support the ongoing construction and operation of Safaricom Ethiopia’s greenfield telecommunications network.

The partnership is between IFC, MIGA, Vodafone, Vodacom, Safaricom, Sumitomo Corporation, and British International Investment to help countries end poverty and meet their citizens’ service demands, including digital connectivity.

IFC will make a $157.4 million equity investment in Global Partnership for Ethiopia BV (GPE) and a $100 million A-loan to its wholly owned subsidiary, Safaricom Telecommunications Ethiopia Private Limited Company (Safaricom Ethiopia).

Following the transaction, IFC will hold a minority position in Safaricom, Ethiopia.

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The Multilateral Investment Guarantee Agency (MIGA) will provide 10-year guarantees of $1 billion to cover the equity investments of Safaricom Ethiopia’s shareholders: Vodafone Group, Vodacom, Safaricom, and British International Investment.

A portion of the MIGA guarantees, $76 million, will come from the MIGA Guarantee Facility, part of the International Development Association’s Private Sector Window, as a first loss layer.

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.

Furthermore, under a license granted in May 2023 by the Central Bank of Ethiopia, Safaricom Ethiopia also plans to launch financial services 2023 under the brand name M-PESA.

 IFC Vice President of Industries Mohamed Gouled confirmed IFC’s support to Safaricom, the country's first private sector-led telecoms operator, and its parent company, the Global Partnership for Ethiopia.

“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," said Gouled.

"Young people, small businesses, and entrepreneurs will benefit from improved access to high-quality digital services such as mobile financial services.”

“MIGA is pleased to help people in all regions of Ethiopia, as the country increases access to high-quality digital services,” said Hiroshi Matano, Executive Vice President of MIGA.

“The creation of Safaricom Ethiopia is one of the largest foreign direct investments into Ethiopia, and with this guarantee, MIGA hopes to stimulate more foreign direct investment in other sectors of the Ethiopian economy.”

On his part, Michael Joseph, Chairman of Safaricom Ethiopia, said digitisation will enhance the country’s economic potential.

“Ethiopia has a large, young and entrepreneurial population that can unlock the country’s economic potential as we advance digitalisation. It is great to have the World Bank units with us as part of the international funding coalition behind Safaricom Ethiopia,” he said.

The project follows over four years of World Bank Group engagements in Ethiopia to open the telecommunications sector to private sector investment and support market liberalisation.