IFC to invest Sh14 billion in Safaricom Ethiopia
International Finance Corporation (IFC), the private lending arm of World Bank, has announced a $157.4 million equity investment (Sh21.9 billion) in Global Partnership for Ethiopia (GPE) and a $100 million A-loan (Sh13.9 billion) to GPE’s subsidiary, Safaricom
Ethiopia, a move that will see IFC become a minority shareholder in Safaricom Ethiopia. At the same time the Multilateral Investment Guarantee Agency (MIGA), a political risk insurer and a member of the World Bank Group, has announced that it will provide 10-year guarantees of $1 billion (Sh139.9 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 (10.6 billion), will come from the MIGA Guarantee Facility, part of the International Development Association’s Private Sector Window, in the form of a first loss layer. In a statement, the two World Bank organisations said the equity investment, loan and guarantees will support the ongoing construction and operation of Safaricom Ethiopia’s greenfield telecommunications network across 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 Mohamed Gouled, IFC Vice President of Industries.
