International Finance Corporation set to invest in Safaricom Ethiopia

 International Finance Corporation, part of the World Bank Group, edges closer to buying US$160 million of equity and about US$100 million of debt of Safaricom Ethiopia.

It is worth noting that if the move is approved by the shareholders of the telecom company and IFC, it will bring down the share of Safaricom in the consortium to 50 per cent.

In a statement, Peter Ndegwa, the CEO of the parent company for Safaricom Ethiopia, confirmed that the negotiation to sell some shares for the World Bank subsidiary is underway.

“At this stage, only IFC will come into the shareholder family. It is at an advanced stage, but it is subject to approval both on their end and on our end,” the CEO said.

“All shareholders need to approve for IFC to come in. It is one where if one shareholder does not approve it, it won’t happen. The intention would be approximately USD 160 million of equity and about USD 100 million of debt.”

If the deal with IFC receives a nod from the telecom company’s shareholders, every shareholder’s stake will be diluted, while Safaricom will remain a significant shareholder.

Safaricom also restated that it is still keen to invest two billion dollars for its venture in Ethiopia in the coming years. It also plans to take some loans from local banks to finance its operation in Ethiopia.

According to Ndegwa, Safaricom invested over US$ 1.2 billion. Of that, 850 million was spent on licenses, while the rest was used to construct data centres and infrastructure development. The telecom developer, which launched services in Addis Ababa and other major cities across the country, managed to get 300,000 subscribers thus far.

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