Safaricom Ethiopia, a telecommunications company, has received a significant investment from the World Bank Group. This investment comes as Ethiopia, the second most populous country in Africa with a young population of around 120 million, aims to unlock its immense social and economic potential through a digital strategy. In a remarkable move, the World Bank Group has made one of its largest-ever investments in Africa by providing equity, debt and insurance facilities to support the development and operation of Safaricom Ethiopia's 4G and 5G mobile networks.
Safaricom Ethiopia's objective is to provide affordable internet access, reliable connectivity and digital services to consumers and businesses across the country. The International Finance Corporation (IFC), the private sector arm of the World Bank Group, will contribute a $157.4 million equity investment to Safaricom Ethiopia's parent company, the Global Partnership for Ethiopia. This consortium includes Vodafone Group, Safaricom Plc, Vodacom Group, Sumitomo Corporation and British International Investment.
Additionally, the IFC will extend a $100 million A-loan as the first tranche of debt facilities to Safaricom Ethiopia. To mitigate political risks, the Multilateral Investment Guarantee Agency (MIGA), another member of the World Bank Group, will provide a 10-year insurance guarantee amounting to $1.1 billion.
The World Bank's investment will enable Safaricom Ethiopia to deploy 4G and 5G mobile networks across the country, benefiting both rural and urban areas. This expanded connectivity is expected to significantly improve the quality of life for communities by granting them access to vital resources, information and opportunities. The impact will be particularly notable in sectors like healthcare and education, where rural and agricultural populations face challenges accessing essential services. Furthermore, Safaricom's mobile financial services, such as M-Pesa, will serve as a crucial lifeline in areas without traditional banks, facilitating secure and affordable transactions, bill payments, salary receipts and short-term loans. Safaricom has also recently obtained a license to introduce financial services in Ethiopia and plans to launch them by the end of the year.