Safaricom’s plans to expand to Ethiopia have been complicated by a US State financier threatening to recall its loans following escalation of armed conflict in the horn of Africa nation.
The US International Development Finance Corporation (DFC)
says that the acts of violence against civilians in Ethiopia’s Tigray region
could affect the release of $500 million loan (Sh53.97 billion) to a consortium
led by Safaricom.
The financing had earlier been thrown into doubt over US
economic sanctions against Ethiopia related to the conflict in the northern
Tigray region, which has killed thousands of people and displaced many more.
But Safaricom last month disclosed that the US State
development financier was granted approval to make select investments in
Ethiopia, including funding the group made up of, among others, the UK’s
Vodafone and South Africa’s Vodacom Group.
The deepening conflict in Ethiopia could force the DFC to
pause the investment and push the telecoms companies to source the cash
elsewhere and at greater cost.
“The board approval signified initial DFC willingness to
consider a loan to the consortium in the event it wins a license but does not
obligate DFC to move forward with the transaction,” the US State development
agency told the Business Daily in an e-mail response.
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