M-pesa Mobile Money Transfers. Photo/Courtesy.
Telecom giant Safaricom PLC has secured a $138 million (approximately Sh17.8 billion) financing deal to accelerate its expansion in Ethiopia which is one of Africa’s fastest-growing and most strategic telecommunications markets.
The milestone financing is expected to fast-track roll-out of digital infrastructure and services, deepen mobile connectivity across Ethiopia and boost inclusion in the region’s second-largest economy.
What Funding Did Safaricom Secure and Who Provided It?
Standard Bank acted as the sole arranger, lender, facility agent and advisor on the deal, committing $138 million to Safaricom Telecommunications Ethiopia PLC (STEP).
This funding marks one of the most significant capital injections aimed at expanding a private telecom operator’s footprint in Ethiopia since liberalization.
Why This Funding Matters for Safaricom and Ethiopia
1. Accelerating Network Rollout
The capital will support ongoing network deployment, improve service coverage and bring digital services to underserved regions where internet penetration remains below regional averages.
2. Boosting Digital Transformation
Standard Bank said that the financing aligns with broader goals to accelerate mobile connectivity and digital transformation in Ethiopia, contributing to economic growth, commerce and innovation.
3. Strategic Milestone for Safaricom
Safaricom CEO Peter Ndegwa said the deal strengthens the company’s ambition to boost digitisation in Africa, expand services like mobile money and support youth, entrepreneurs and underserved communities.
Safaricom in Ethiopia: Growth Trajectory and Milestones
Safaricom entered the Ethiopian market in 2021 after winning a license through the Global Partnership for Ethiopia consortium, breaking the monopoly of state-owned Ethio Telecom.
Since then STEP has rapidly grown its customer base to over 10 million active users within four years and expanded its network to cover major towns and continues to accelerate daily customer acquisition.
Ethiopia’s Internet penetration has risen significantly from 15 percent to 19 percent between 2020 and 2024, according to a World Bank report although coverage still lags behind many African markets.
This trajectory shows the potential of the Ethiopian market as a commercial engine for Safaricom over the next decade.
What This Means for Customers and Investors
The expanded financing will enable wider 4G coverage and significantly improve mobile services, allowing more customers to access reliable connectivity across Ethiopia.
As infrastructure scales, Safaricom will roll out broader access to M-PESA mobile money, digital financial services and new value-added platforms, supporting financial inclusion and everyday digital use for individuals and businesses.
For investors, the funding signals strong confidence from major financial institutions in Safaricom’s long-term Africa strategy.
The capital injection eases short-term pressure from heavy capital expenditure while positioning the business for sustainable revenue growth as customer numbers, service usage and digital adoption continue to rise.
Safaricom’s Ethiopian business has been a major strategic focus even though it has operated at a loss, with parent company results indicating narrowing losses and growing active users. Recent Reuters reporting shows Safaricom’s group profitability improved even as Ethiopia’s losses have declined.
Challenges and Risks Ahead
Safaricom’s Ethiopia unit continues to face key challenges, including currency pressure from the volatility of the Ethiopian birr, an evolving competitive and regulatory environment, and the high cost of rolling out network infrastructure in rural and hard-to-reach areas.
However, regulatory reforms in Ethiopia that encourage private-sector participation remain a pivotal enabler of Safaricom’s growth strategy.
What’s Next for Safaricom in Ethiopia?
With this new capital injection Safaricom is poised for expanded network coverage and services and Ethiopia could become one of the telecom’s most important markets outside Kenya.
Safaricom’s broader Africa strategy will likely target deeper digital financial inclusion and partnerships across East Africa.
