The IFC and the Multilateral Investment Guarantee Agency (MIGA) will support the ongoing construction and operation of the project, leading to more affordable internet, reliable mobile connectivity and technology access for people and businesses across the country.
The first partnership is between IFC, MIGA, Vodafone, Vodacom, Safaricom, Sumitomo Corporation and British International Investment in Ethiopia and will address the World Bank Group’s core mandate to help countries end poverty and meet their citizens’ demands for services including digital connectivity.
IFC will make a US$157.4 million equity investment in Global Partnership for Ethiopia BV (GPE) and a US$100 million A-loan to its subsidiary Safaricom.
Following the deal, IFC will hold a minority stake in Safaricom Ethiopia.
“IFC is delighted to announce its support to Safaricom Ethiopia, the first private sector-led telecoms operator in the country, and its parent company the Global Partnership for Ethiopia,” said Mohamed Gouled, vice president of industries at IFC.
“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.
In October, Safaricom said it planned to invest US$300 million a year into the country over the next ten years, having already invested US$1.2 billion to that point.
MIGA will provide 10-year guarantees of US$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 that US$76 million will come from the MIGA Guarantee Facility, part of the International Development Association’s Private Sector Window.
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.
“Young people, small businesses, and entrepreneurs will particularly benefit from improved access to high-quality digital services such as mobile financial services,” Gouled added.
“The Ethiopian telecommunications market — as well as the country’s economy and society — will benefit substantially from equitable, high-quality internet access and improved financial inclusion, advancing the country on a path to a more prosperous future.
When it launched services in October 2022, Safaricom Ethiopia became the first private telecom operator in Ethiopia, one of the world’s last telecom monopoly markets.
Market liberalisation is key for the Ethiopian government’s Digital Ethiopia 2025 plan to help the country realise its digital potential.
By increasing access to digital services, the project has the potential to help create up to 1.5 million direct and indirect jobs in Ethiopia, contribute to the country’s sustainable future growth, and increase both financial and social inclusion for Ethiopians.
The project follows more than four years of World Bank Group engagements in Ethiopia aimed at opening the telecoms sector to private sector investment and supporting market liberalisation.
Over the last decade, the IFC has committed and mobilised more than US$7 billion in digital infrastructure and services, with more than US$2.5 billion committed between July 2020 and June 2022.
