The International Finance Corporation (IFC) plans to lend Safaricom Ethiopia an additional $350 million to support its expansion of telecommunications and mobile money services in the country. This follows IFC’s recent disclosure of its intent to augment the $157.4 million debt and $100 million equity investment (for a 7.25 percent stake) it provided to the telco last year.
If approved, this new loan will bring the total financing from IFC and its partners to Safaricom Ethiopia—majority-owned by Kenya’s Safaricom Plc—to $607.4 million.
“IFC’s proposed loan of up to $350 million will support STEP (Safaricom Telecommunications Ethiopia Private Limited Company) in expanding its telecommunication network and mobile money services, enhancing the competitiveness of the local telecommunications market,” stated the lender in its disclosures. The IFC indicates it is prepared to lend between $150 million and $200 million, with the remaining funds to be sourced from development finance institutions and other lenders.
Last year, IFC committed $260 million in debt and equity investments to Safaricom Ethiopia, owned by the Global Partnerships for Ethiopia (GPE), a consortium of international investors in which Safaricom Kenya holds a 51.7 percent stake. According to IFC, the initial investments demonstrated “satisfactory environmental and social (E&S) performance,” as assessed by the lender’s team, thereby justifying the proposed additional investment.
The multilateral lender anticipates that the expanded investments will further enhance Safaricom Ethiopia’s competitiveness in the mobile connectivity industry and increase access to quality phone networks in the country.
Source: Business Daily Africa
