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The International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) of the World Bank Group have made significant investments in Safaricom Ethiopia, marking a crucial milestone in the country’s pursuit of digital transformation.
With an equity investment and guarantees, the IFC and MIGA are paving the way for Safaricom Ethiopia to revolutionize the telecommunications sector, enhance connectivity, and foster economic growth in Ethiopia.
This partnership underscores the World Bank Group’s commitment to supporting countries in their development efforts and meeting the growing demand for digital services.
Unlocking Ethiopia’s Digital Potential
Ethiopia, Africa’s second most populous country, is poised to unlock its digital potential with the entry of Safaricom Ethiopia as the first private sector-led telecom operator.
Breaking the long-standing telecom monopoly, this development aligns with the government’s Digital Ethiopia 2025 plan and its commitment to leveraging technology for socio-economic advancement.
The investments from IFC and MIGA will enable Safaricom Ethiopia to expand its operations, roll out 4G and 5G mobile networks, and provide affordable internet and reliable mobile connectivity across urban and rural areas.
“The equity investment by IFC and the 10-year guarantees of 1 billion USD by MIGA is a show of confidence in Ethiopia as a viable growth market as well as in our business,” says Peter Ndegwa, CEO of Safaricom PLC.
IFC Investment
The IFC will make a significant equity investment of $157.4 million in Global Partnership for Ethiopia BV (GPE), as well as provide a $100 million A-loan to Safaricom Telecommunications Ethiopia Private Limited Company.
By holding a minority position in Safaricom Ethiopia, the IFC aims to promote healthy market competition, reduce costs for consumers, and increase access to high-quality digital services, particularly for young people, small businesses, and entrepreneurs.
The IFC’s investment reflects its strategy to foster competition in the global digital sector and contribute to a more prosperous future for Ethiopia.
MIGA’s Guarantees
In addition to the IFC’s equity investment, MIGA will provide 10-year guarantees totalling $1 billion to safeguard the equity investments of Safaricom Ethiopia’s shareholders, which include Vodafone Group, Vodacom, Safaricom, and British International Investment.
MIGA’s guarantees, including a $76 million first loss layer from the MIGA Guarantee Facility, demonstrate the agency’s commitment to stimulating foreign direct investment and promoting economic growth in Ethiopia.
The guarantees offer assurance to investors and further encourage their participation in Ethiopia’s evolving telecom market.
Advancing Digital Inclusion and Economic Prosperity
The investments from IFC and MIGA are expected to have far-reaching benefits for Ethiopia. By expanding access to digital services, Safaricom Ethiopia’s network will contribute to financial inclusion and create opportunities for economic growth.
The project has the potential to generate up to 1.5 million direct and indirect jobs, fostering sustainable development and enhancing financial and social inclusion for Ethiopians.
Moreover, the partnership represents one of the largest foreign direct investments in Ethiopia, showcasing the confidence of international investors in the country’s economic potential.
The World Bank Group’s investments through the IFC and MIGA in Safaricom Ethiopia underscore their commitment to supporting Ethiopia’s digital transformation and economic development.
By promoting healthy market competition, expanding connectivity, and improving access to digital services, this collaboration will pave the way for a more prosperous future for Ethiopia and its citizens.
The investments signal confidence in Ethiopia as a viable growth market and demonstrate the power of partnerships in driving sustainable development and digital inclusion.
