Safaricom Ethiopia loans hit $117m

Wednesday February 07 2024

Safaricom CEO Peter Ndegwa during an interview at Michael Joseph Centre in Nairobi, Kenya on October 5, 2023. PHOTO | BILLY OGADA | NMG


Safaricom Telecommunications Ethiopia Plc raised its local borrowings to an equivalent of Ksh18.8 billion ($117.5 million) at the end of December 2023 as part of the diversification of its funding structure.

Disclosures by the company’s majority shareholder, Safaricom Plc, show that borrowings from the Ethiopian market rose from Ksh15.2 billion ($95 million) in June 2023. The telco says the operating unit’s local market borrowings are set at varying interest rates.

The operator first reported the Birr-denominated loans whose tenors averaged five years in the year ended March 2023 when the borrowings stood at Ksh12.8 billion ($80 million).

The domestic loans by STE have served to diversify funding for the Ethiopian operation away from just shareholder and equity and third-party borrowings.

Read: Safaricom got $400m loan for Ethiopia licence: bank

Deferred vendor payments, which stood at Sh51 billion at the end of December, have complemented the local market’s borrowings.


The shareholders of the Global Partnership for Ethiopia (GPE) had contributed to Ksh258.8 billion ($1.614 billion) by December 2023, including an injection from the International Finance Corporation with the funding being split by their respective shareholding in the entity through which they own the startup telco.

The funding includes a licence fee of Ksh136.2 billion ($850 million) and a Ksh24 billion ($150 million) M-Pesa investment protection fee.

Safaricom’s contribution amounts to Ksh133.7 billion ($834 million), which is partly funded through a Ksh64.1 billion ($400 million) loan borrowed from a consortium of local and international banks.

The Kenyan telco holds a majority 55.71 percent stake in STE with non-controlling shareholders in the entity being the Vodacom Group Limited at 6.19 percent, Sumitomo Corporation at 27.2 percent and the CDC Group at 10.9 percent.

Safaricom has seen good traction in its Ethiopia business with revenues in the nine months to December 2023 coming in at Ksh4.82 billion compared to just Ksh1.68 billion earned in the year ended March 2023.

Read:Safaricom triples M-Pesa users in Ethiopia to 3.1m

During the nine months, the operator marked a milestone as the number of M-Pesa users enrolled on its Ethiopian unit increased by nearly three-fold to 3.1 million customers with Ksh18.5 billion worth of transactions.

Safaricom’s Ethiopia subsidiary launched the mobile money service on August 15 last year.

“We are very pleased with the optimism that M-Pesa has evoked in the youthful population of Ethiopia, and we look forward with great excitement to the transformation M-Pesa will bring to financial inclusion in Ethiopia,” said Safaricom chief executive Peter Ndegwa.

At the end of December, STE had 2,242 base stations of which 1,252 were self-built. The stations cover 33 towns which represent about one-third of the population coverage.