Ethiopia’s Safaricom eyes US$350m loan from IFC

The International Finance Corporation (IFC) is set to lend Safaricom Ethiopia an additional Ksh46 billion (US$350 million) to support its expansion of telecommunications and mobile money services in the country.

In latest disclosures, the global private sector financier has revealed plans to top up the debt (US$157,4 million) and equity investment (US$100 million for a 7,25 percent stake) it already injected into the telco last year.

If approved, this will bring IFC and its partners’ total financing to Safaricom Ethiopia – which is majority owned by Kenya’s Safaricom Plc – to Ksh80 billion (US$607,4 million).

“IFC’s further proposed loan of up to US$350 million will support STEP (Safaricom Telecommunications Ethiopia Private Limited Company) with the ongoing expansion of its telecommunication network and mobile money services and enhance the competitiveness of the local telecommunications market,” the lender said in the disclosures.

The financier says it is ready to lend between US$150 million and US$200 million, noting that the rest of the balance will be sourced from development finance institutions and other lenders.

IFC had last year committed a total of Sh34 billion in debt and equity investments in the Ethiopian subsidiary of Safaricom, which is owned by the Global Partnerships for Ethiopia (GPE), a consortium of international investors in which Safaricom Kenya has a majority stake of 51,7 percent.

IFC said the initial investments “have had satisfactory environmental and social (E&S) performance,” based on the assessment done by the lender’s team, paving the way for the extra investment that’s now been proposed. ‑ Business Insider Africa