Standard Bank, Safaricom Seal USD 138 Million Deal
The new funding from Standard Bank will enable the firm to carry on with the expansion of digital services.
Dr. Joshua Oigara, Regional Chief Executive for East Africa at Standard Bank Group.Photo/Courtesy
By Ruth Sang
Standard Bank, operating under the name Stanbic Bank in Kenya, has signed a big deal with Safaricom Telecommunications that will see the bank offer funding amounting to a total sum of 138 million USD, or rather approximately 17.94 billion Shilling, in support of Safaricom Telecommunications Ethiopia PLC (STEP) in a move that signals a big boost in the provision of digital connectivity in the entire East African region, especially the rising telecommunications sector in Ethiopia.
As indicated in the press release, this financial arrangement will help Safaricom expand their digital infrastructure in Ethiopia. It is believed that this will help improve operations, increase adoption of digital services, and boost economic growth in Ethiopia. Development of digital infrastructure is believed to be a major contributor in ensuring economic growth in any region.
In terms of the deal, Standard Bank was integral in structuring and arranging the financing. The financial institution was the sole arranger, lender, and facility agent of the term financing facility provided for Safaricom Telecommunications Ethiopia PLC. The involvement of Standard Bank, in particular, indicates its capabilities and commitment to providing financing solutions for big transformative projects in Africa’s major growth industries.
The agreement between Standard Bank and Safaricom comes against the background that the demand for quality digital network services and mobile services is steadily rising in East Africa. Ethiopia has particularly emerged as one of the key markets that harbor immense potential for digital innovations driven by factors such as the large population base, rising mobile subscription rates, and ongoing reforms in the telecom sector.
Commenting on the arrangement, Dr. Joshua Oigara, Regional Chief Executive for East Africa at Standard Bank Group, said that the partnership shows that the bank is “committed to facilitating sustainable growth in the region.” He added that “support for investment in digital infrastructure is at the heart of our strategy to unlock sustainable and inclusive growth.”
“Through our participation in the expansion of digital connectivity in Ethiopia, we are enhancing economic links and fostering innovation in the digital economy in East Africa,” said Dr. Oigara. The official further highlighted the significance of improving digital access in empowering small and medium-scale enterprises and improving access to financial services as well as innovation in several sectors of the economy.
The funding is also intended to strengthen the position of the firm as one of the major players within the regional communication sector. Through the investment vehicle known as Safaricom Telecommunications Ethiopia PLC, the firm has been heavily investing in the development of networks and services that are meant to meet the different needs of the citizens of Ethiopia. The new funding from Standard Bank will enable the firm to carry on with the expansion of digital services.
Industry experts have observed the growing importance of collaborations between financial institutions and telecommunication firms in spearheading the digital transformation agenda in Africa. With the two necessary ingredients—financial acumen and technology—collaborations between the two sectors could open up novel sources of growth. In this respect, the USD 138 million agreement between Standard Bank and Safaricom thus not only entails a financial transaction but essentially a whole gamut of investment in embracing the digital future with far-reaching consequences for connectivity and economic development of East Africa as a region.
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