Project Company

Safaricom Telecommunications Ethiopia private limited company is the Ethiopian operating company that is owned by the Consortium through Global Partnership for Ethiopia BV as the investment vehicle holding their equity interest in the Project.

Shareholders

Voda Family Ethiopia Holding: Voda Family is a special purpose vehicle holding the interest of Safaricom PLC (Kenya), Vodacom Group (South Africa), and Vodafone Group (UK).

Safaricom PLC is a leading purpose led technology company that provides a wide range of services and solutions, including mobile voice, messaging, data, financial and converged services in Kenya. It is also the company behind M-PESA, a leading African mobile financial services platform and is listed on the Nairobi Securities Exchange in Kenya.

Vodacom Group, including Safaricom, serves 203 million customers spanning across the consumer and enterprise segments. From its roots in South Africa, Vodacom Group has grown its business to include operations in Tanzania, the DRC, Mozambique, Lesotho, Kenya and more recently Ethiopia and Egypt. Population reach across the markets exceeds 500 million people. 

Vodafone is the largest pan-European and African telecoms company. Vodafone provides mobile and fixed services to over 300 million customers in 17 countries, partner with mobile networks in 43 more and have one of the world’s largest IoT platforms. In Africa, Vodafone’s financial technology businesses serve more than 76 million customers across eight countries – managing more transactions than any other provider. Vodafone’s purpose is to connect for a better future by using technology to improve lives, businesses and help progress inclusive sustainable societies. Vodafone is committed to reducing its environmental impact to reach net zero emissions by 2040.

Sumitomo Corporation is a leading Fortune 500 global trading and business investment company with 128 locations in 66 countries and regions. The Company conducts commodity transactions in all industries utilizing worldwide networks, provides customers with financing, serves as an organizer and a coordinator for various projects, and invests in companies to promote greater growth potential.

British International Investment (formerly CDC) is the world’s first development finance institution, owned by FCDO (previously DFID).

International Finance Corporation (IFC) — a member of the World Bank — is the largest global development institution focused on the private sector in emerging markets. IFC works in more than 100 countries.

The Company plans to invest over USD8 billion in Ethiopia over the next 10 years. Under this proposed Project, IFC is considering providing STEP with a loan of up to USD 350 million to support the Project (subject to review and approval by Safaricom ET’s shareholders) and up to USD 55 million equity investment to the Company.

Blended Finance Section

IFC as implementing entity of the IDA PSW is expected to provide up to US$40 million from IDA PSW LCF (“blended finance co-investment”) to support the up to US$350 million of debt facility. The blended finance co-investment is needed to address significant sector and macroeconomic risks associated with the investment, crowd-in IFC and other senior lenders, and enable the Company to pursue its ambitious plan for the development of crucial telecom infrastructure. Deployment of new telecom infrastructure will increase access and quality to telecom services transform the digital economy by supporting the development of money services. Without the support of the blended finance co-investment, IFC and other lenders will not be able to invest in the project.

The level of concessionality (i.e., “subsidy”) provided by the blended concessional finance co-investment is estimated to be 1.7% of the total project cost of US$1.3 billion. This estimate is based on the difference between (i) a “reference swap rate” and (ii) the “concessional swap rate” received by the IDA PSW LCF. As is the case with all of IFC’s blended concessional finance co-investments, this project has been assessed against the Enhanced Blended Concessional Finance Principles for DFI Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017.  Further information on these Enhanced Principles, IFC’s blended finance approach and governance, and historical information on estimated subsidy levels in IFC’s blended finance portfolio can also be found at:  www.ifc.org/blendedfinance.

STEP, the project company, is incorporated and located in Ethiopia.

The governance risk to development impact is deemed low to moderate given that the Company will put in place highly formalized governance structures. The Company is adopting best practice Corporate Governance/ESG policies from within the Voda Family, many of which are publicly available.

This is a Category B project based on IFC’s Policy on Environmental and Social Sustainability. Based on IFC’s review, coupled with existing knowledge of the client and sector, the project is expected to have limited adverse environmental or social risks and/or impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures. Given IFC’s existing knowledge of the client, sector, and context, key E&S aspects include: (i) the company’s E&S Management System (ESMS) to manage the network expansion process; (ii) ongoing implementation of the existing site E&S assessment procedure, particularly regarding potential biodiversity impacts related to tower construction activities, (iii) implementation of fair and safe labor and working conditions for direct and contract workers, (iv) adequate monitoring and management of third-party service providers, (v) stakeholder engagement and grievance management, and (vi) implementation of security management protocols and procedures.