· A loan deal was signed by Safaricom and its partners with US sovereign wealth fund International Development Finance Corporation (DFC) to borrow up to $500 million to fund expansion into Ethiopia’s telecommunications market.
· Global Partnership for Ethiopia, a joint venture between Safaricom and its parent companies Vodafone Group Plc and Vodacom Group Limited are bidding for one of two telecommunications licences.
A loan deal was signed by Safaricom and its partners with US sovereign wealth fund International Development Finance Corporation (DFC) to borrow up to $500 million to fund expansion into Ethiopia’s telecommunications market. Global Partnership for Ethiopia, a joint venture between Safaricom and its parent companies Vodafone Group Plc and Vodacom Group Limited are bidding for one of two telecommunications licences being auctioned in Ethiopia. Safaricom is the majority shareholder of the consortium with a 51 percent stake. Vodacom has a five percent share in the joint venture, with the rest of the ownership distributed among other financial investors.
The financial investment in Ethiopia is expected to touch $1 billion, with the DFC loan deal. The loan agreement with Global Partnership for Ethiopia will finance the design, development, and operation of a new private mobile network provider and the acquisition of a mobile network provider license according to DFC statement. The project is expected to create a massive developmental impact through the setting up of a new private telecommunications network that will increase connectivity in Ethiopia with reliable technology. The DFC loan offers long-term financing on favourable terms with a maturity period of five to 25 years, with repayment schedules set on a quarterly or semi-annual basis.
Ethiopia, a country of more than 100 million people with a relatively lower uptake of mobile and broadband services, is viewed as a promising market. According to the Ethiopian Communications Authority, it had received expressions of interest from Safaricom consortium, Etisalat, Axian, MTN, Orange, Saudi Telecom Company, and Telkom SA. Others were Liquid Telecom, Snail Mobile, Kandu Global Communications and Electromecha International Projects. The auction of the licenses is anticipated in February or March next year.
