Standard Bank injects $138 million into Safaricom Ethiopia to fuel network expansion

Standard Bank, trading as Stanbic Bank in Kenya, has announced a USD 138 million (approximately KES 17.94 billion) financing deal with Safaricom Telecommunications to accelerate the operator’s expansion in Ethiopia.

The agreement, disclosed on Thursday, sees Africa’s largest lender by assets acting as the sole arranger, lender, and facility agent for the term loan.

The funding is earmarked specifically for Safaricom Telecommunications Ethiopia PLC (STEP) to support its aggressive rollout of digital infrastructure and services. This capital injection comes at a critical juncture as Safaricom seeks to deepen its foothold in Ethiopia’s high-potential but fiercely competitive telecommunications market.

Since securing its operating license in 2021, Safaricom has been the primary challenger to the state-owned incumbent, Ethio Telecom. While the incumbent boasts over 70 million subscribers and a dominant mobile money platform, Safaricom has made significant inroads. The company recently announced it had hit 10.1 million three-month active customers, a major milestone achieved just four years after entering the market.

“This partnership reflects our commitment to enabling sustainable growth across the region. By supporting the expansion of digital connectivity in Ethiopia, we are strengthening economic linkages, opening new opportunities for businesses and communities, and contributing to the advancement of East Africa’s digital economy,” Dr. Joshua Oigara, Regional Chief Executive for East Africa at Standard Bank Group, said.

This transaction extends a history of collaboration between the two entities. Standard Bank was among the key advisors and financiers that supported Safaricom’s initial license bid and network deployment in 2021. Anthony Ndegwa, Executive Vice President for Telecoms, Media, and Technology at Stanbic Kenya, noted that the financial solutions were “bespoke to the business while responsive to the market’s needs.”

“We are honoured to have partnered with Safaricom again in enabling and supporting their ongoing vision to drive digital transformation and inclusion in Ethiopia,” he added.

Ethiopia’s digital landscape is undergoing rapid transformation, driven by government reforms aimed at liberalizing the economy. A recent World Bank report, Empowering Ethiopians by Laying the Digital Foundations for Economic Growth, highlights that between 2020 and 2024, at least 4 million additional people gained internet access, pushing national coverage from 15 percent to 19 percent.

For Safaricom CEO Peter Ndegwa, the new funding is a tool to capitalize on this growing connectivity demand and the company’s “Vision 2030” strategy.

“As a business, we are guided by innovation and strategic partnerships. We aim to transform lives at scale, empowering youth, entrepreneurs, and underserved communities to fully participate in Ethiopia’s digital economy and realise the promise of shared prosperity by 2030. Through this partnership we are given the opportunity to pursue this goal and grow further to digitally enable Africa,” said Mr. Ndegwa.

Beyond basic connectivity, the expansion is expected to bolster Safaricom’s mobile money proposition, M-PESA, which faces the task of catching up to Ethio Telecom’s Telebirr. Taitu Wondwosen, Head of Standard Bank in Ethiopia, pointed out that infrastructure is the bedrock of financial inclusion.

“As a bank we are dedicated in partnering with relevant parties to drive infrastructure development that will help accelerate the growth of the continent’s economy. Digital and financial inclusion in the African market has been one of the key objectives to break barriers and enabling individuals, communities and businesses to access affordable financial products and services that meet their needs,” stated Ms. Wondwosen.

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