Safaricom Ethiopia, a leading operator in Ethiopia’s telecommunications sector, has taken a new strategic step to accelerate its network infrastructure expansion. The company has announced that it is in negotiations with the International Finance Corporation (IFC), a member of the World Bank Group, to secure a new local-currency financing facility denominated in Ethiopian birr, valued between $100 million and $150 million. This financing discussion was disclosed during an investor forum held in Mombasa, where Safaricom Ethiopia CEO Wim Vanhelleputte stated that the company is actively working with the IFC to structure a syndicated loan in Ethiopian birr.
The primary driver behind Safaricom Ethiopia’s decision to pursue this strategy is directly linked to the risks and shortages associated with foreign exchange fluctuations in Ethiopia. While the telecom operator currently collects its revenues in local currency, much of its capital expenditures and technology purchases must be made using foreign currency. This currency mismatch has long posed a significant challenge for foreign investors operating within the country.
Consequently, securing a loan denominated in Ethiopian birr will allow the company to service its debt directly from its local revenues, creating a vital opportunity to de-risk itself from heavy financial losses caused by exchange-rate volatility.
Safaricom Ethiopia turned its attention toward the IFC because strict regulatory constraints placed on domestic commercial banks have limited their capacity to meet the operator’s large-scale financing needs. Company executives previously noted that Safaricom was forced to raise nearly $134 million in external debt because it was difficult to secure sufficient long-term funding from local lenders.
Under current National Bank of Ethiopia directives, commercial banks face strict caps on their annual loan growth, alongside limitations on single-borrower exposure. These regulatory hurdles make it exceptionally difficult for massive infrastructure projects to secure long-term domestic financing. Although Ethiopia has embarked on sweeping economic reforms and financial sector liberalization, the domestic capital market remains in its infancy, forcing large firms to continue relying heavily on shareholder funding or foreign-currency borrowing.
This local-currency financing negotiation comes at a critical juncture for Safaricom Ethiopia. Since launching its commercial operations in 2022, the company has invested billions of dollars in telecom infrastructure to expand its network coverage across most of the country. Having recently surpassed 10 million customers, the company is now transitioning from its initial capital-intensive rollout phase toward a stage of growth, monetization, and operational breakeven. The IFC is already a strong financial partner for Safaricom Ethiopia, having previously made a $157.4 million equity investment and provided a $100 million loan in 2023 to support the telecom network’s expansion.
If approved, this new facility would represent one of the largest local-currency syndicated loans ever arranged for a private-sector company in Ethiopia. This successful syndication would serve as an important test case for Ethiopia’s evolving financial system, demonstrating the capacity of development finance institutions and local banks to jointly fund large-scale private investments in local currency. Ultimately, a successful outcome could establish a replicable model for future infrastructure, digital expansion, energy, and manufacturing projects in Ethiopia. For Safaricom Ethiopia, the fresh capital will provide the competitive strength needed to deepen network coverage, expand digital services, and solidify its position in one of Africa’s fastest-growing telecommunications markets.
