The Government of Ethiopia has announced plans to release an Expression of Interest (EOI) for the sale of a 40 percent stake in Ethio Telecom. Ethiopia’s Ministry of Finance and Public Enterprise Holding and Administration Agency (PEHAA) said they had completed a key milestone in the partial privatization process which commenced in 2018.
International Investors will now be allowed to bid for a stake in one of Africa’s largest Telecommunication companies. The investors will be given 30 days to respond with an expression of interest. After the issuance of the EOI, the process will follow with a Request for Proposal (RFP).
The move comes after an international consortium named the Global Partnership for Ethiopia was awarded a license to operate telecom services in Ethiopia. The impact investment consortium aspires to support Ethiopia’s digital transformation and positively enhance the lives of its citizens.
The partners in the consortium are led by Safaricom Plc, a partner member of the Vodafone Group, and will establish a new operating company in Ethiopia which aims to start providing telecommunications services from 2022. In addition to Safaricom, the partnership includes: Vodacom Group; Vodafone Group; Sumitomo Corporation – one of the largest international trading and business investment companies; and CDC Group – the UK’s development finance institution and impact investor.
Ethiopia is home to over 112 million people, making it the second-largest country in Africa by population. It is one of the last countries in the world to introduce competition in the telecom industry, a rigorous process started by the government in 2019 as part of its Economic Reform Agenda, with the support of the International Finance Corporation. The reforms aim to increase jobs, reduce poverty and grow the local economy in an inclusive and sustainable manner.
Deloitte has been appointed as the lead transaction adviser of the privatization process of Ethio Telecom. The firm is in the final process of completing the preparatory work including business plan, financial, legal and tax due diligence and business valuation following global best practices.