US backs Vodafone-led bid for Ethiopia licence with $500m

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A US government agency is supporting Vodafone’s consortium that is bidding for one of Ethiopia’s two new telecoms licences with a loan of US$500 million.

The money comes from the International Development Finance Corporation (IFC), based in Washington DC, which earlier this week spent $300 million on Africa Data Centres — though that was an investment, not a loan.

Ethiopia is most of the way through liberalising its telecoms market, which until now has been a monopoly in the hands of state-owned Ethio Telecom.

After many delays, potential bidders had to tell the Ethiopian Communications Authority (ECA) of their interest in bidding, but the deadline for bids is 5 March 2021.

The IFC says that it is making “an 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 licence. 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 utilising trusted technology.”

Vivek Badrinath, formerly Vodafone’s regional CEO for Africa, Middle East and Asia, said in January 2020 that the group is working on an Ethiopian bid with its sub-Saharan African operation, Vodacom, and Safaricom, the Kenyan operator that is also part-owned by the Vodafone group. Badrinath is now CEO of Vantage Towers, Vodafone’s tower business.

Wider details of the Vodafone interest in Ethiopia are scant. A report by Bloomberg in June 2020 said the consortium was attracting the interest of CDC Group, the state-backed UK development finance operation that was once the Commonwealth Development Corporation.

The ECA in Addis Ababa has not yet announced the names of companies that have shown interest in bidding for the two new licences, a move that will take the number of competitors in the country to three. The ECA has said that it will be at least a decade before a fourth operator is allowed into the market.