Dealflow | December 22, 2020

DFC approves $500 million financing for Safaricom-led Ethiopian telecom project

Roodgally Senatus
ImpactAlpha Editor

Roodgally Senatus

ImpactAlpha, December 22 — The U.S. International Development Finance Corp. approved a $500 million loan for companies seeking a telecommunication license in Ethiopia, led by Kenyan mobile provider Safaricom. Safaricom said it needs $1 billion to complete the mandate.

The financing is part of DFC’s announcement last week of $2.1 billion in new debt investments to boost economic growth in Africa, Eastern Europe, Indo-Pacific, Latin America and the Middle East.

DFC’s Adam Boehler said the investments “will strengthen small businesses, support female entrepreneurs, expand telecommunications and increase development in emerging markets.”

COVID response

An executive order signed by President Trump earlier this year gave DFC authority under the Defense Production Act to finance domestic production of commodities deemed critical to the effort to stem the coronavirus pandemic (see, “White House stands up an impact investing arm to finance COVID-response suppliers”).

The agency was forced to halt the first such loan, a $765 million commitment to Eastman Kodak Co. It has approved a $590 million loan to ApiJect Systems Corp. for vaccines injectors.

Recent deals

DFC backed Bangalore-based Varthana with a $15 million loan to help the company support schools amid the COVID crisis, including help with the transition to online learning. It provided Netherlands-based Lumos with $35 million in financing to expand access to solar energy in Nigeria.