The U.S. International Development Finance Corporation (DFC) has provided up to $500 million loan to the Vodafone-led Global Partnership for Ethiopia that will finance the design, development, and operation of a new private mobile network provider and the acquisition of a mobile network provider license.
This loan is part of US DFC’s investments this quarter totaling more than $2.1 billion to advance development in emerging markets in Africa, Eastern Europe, Indo-Pacific, Latin America, and the Middle East.
The loan will strengthen the Vodafone-led consortium bid which includes Vodacom and Safaricom. They had previously said that they would require $1 billion to operate a mobile network in Ethiopia.
The project is expected to have a “highly developmental impact through the creation of a new private telecommunications network that will increase connectivity in Ethiopia while utilizing trusted technology.”
The Ethiopian government is aiming to sell two new mobile network operator licences by February 2021. It is also selling a minority stake in state-owned incumbent Ethio Telecom, which has long been the sole player in the market.
All these measures are part of a government push towards liberalising the country’s telecoms sector.
According to a Bloomberg report, the Prime Minister Abiy Ahmed’s government intended to hold auctions this year, but the process was stalled by multiple factors including the Covid-19 pandemic, issues around regulation, and a delayed national election.
The telecom privatization process was intended to kickstart a broader sale of state assets to help raise foreign exchange and boost the economy, with rail and industrial parks among the sectors slated for disposal.
