Safaricom Ethiopia has received a major boost with news that the World Bank Group, one of the world’s major development finance institutions, will invest in the business.
Safaricom launched mobile services in Ethiopia at the end of last year as part of the government’s strategy to open up the telecommunications sector and increase digitalisation.
As Africa’s second most populous country, with a young population of around 120 million, Ethiopia has huge social and economic potential which the government hopes will be unlocked by its digital strategy.
Investing in Ethiopia’s future
The World Bank Group has agreed to make one of its largest ever investments into Africa to provide equity, debt and insurance facilities to support the construction and operation of Safaricom Ethiopia’s 4G and 5G mobile networks.
Safaricom Ethiopia intends to bring consumer and business customers in all regions of Ethiopia more affordable internet and reliable connectivity, as well as other digital services.
The International Finance Corporation (IFC), the private sector arm of the World Bank Group whose mission it is to reduce global poverty, will make a $157.4 million equity investment into Safaricom Ethiopia’s parent company, the Global Partnership for Ethiopia – an international consortium comprising of Vodafone Group, Safaricom Plc, Vodacom Group, Sumitomo Corporation and British International Investment.
In addition, IFC will make a $100 million A-loan to Safaricom Ethiopia as a first tranche of debt facilities.
The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group that provides political risk insurance for projects such as this one, will provide a 10-year insurance guarantee of $1.1 billion.
Creating a digital society
The investment by the World Bank will help Safaricom Ethiopia roll out, launch, and operate 4G and 5G mobile networks across the entire country – including in rural and urban areas.
By bringing these communities online, we will help improve their quality of life and give them greater access to resources, information and opportunities.
For example, when looking at healthcare and education, it can be a challenge for Ethiopia’s large rural and agricultural population, to get to schools and hospitals. Using technology, we can bring these services to them and give them access to a range of additional tools and information.
And when it comes to financial services, in areas where banks are not accessible, mobile financial services can prove to be a lifeline.
We’ve seen our own mobile money service M-Pesa have a huge impact on more than 51 million customers across seven countries in Africa offering a safe, secure and affordable way to send and receive money, top-up airtime, make bill payments, receive salaries and get short-term loans.
Last month, we received the licence to roll out financial services in Ethiopia too and plan to do this by the end of the year.
Furthermore, we are working on more co-funded development projects with the World Bank and other partners as we seek to develop digital societies in Africa and Europe that help countries accelerate their progress towards the United Nations Sustainable Development Goals.
