US ban dims Safaricom loans for Ethiopia entry

By BRIAN NGUGI, July 15, 2021

Safaricom Loans

SUMMARY

  • 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.

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 licence 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.

Source: Business Daily Africa

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