Telecom privatization proceeds to go to Industrial Development Fund
Proceeds from the partial privatization of Ethio-Telcom will be deposited in the Industrial Development Fund account opened by the Ministry of Finance (MoF), The Reporter has learnt.
While the allocation modalities of the fund will be decided based on a directive by the Ministry, it is expected to be used to develop existing and new industrial enterprises based on the industrial policy of the government.
“Based on the privatization law of the country, all of the proceeds from the privatization will go to the industrial development fund,” said Brook Taye (PhD), senior advisor to the Minister of Finance.
There was slim hope amongst few executives that a certain amount of the privatization proceeds will be allocated to further capitalize Ethio-Telecom or undertake projects aimed at expanding the infrastructure.
Nonetheless, according to the privatization law adopted last year, any privatization proceeds shall be paid net of the costs of the transaction into an industrial development fund administered by the Ministry of Finance.
Forty percent of the stake of Ethio-Telecom will be up for sale for eligible investors who are willing to invest in the telecom sector. Five percent of the share will be sold to the public, while the government retains the majority.
Last week, the telecom giant called on interested telecom providers who would be willing to share its infrastructure, including 7,300 towers, 21,327 km fiber network and 4,000km metro fibers in the cities.
“Ethio-Telecom’s invitation will certainly encourage developers to bid for the two telecom licenses that will be issued this year,” said Brook.
In addition to enhancing towers, Ethio-Telecom said it has developed a hybrid power solutions strategy to ensure site availability and made it scalable enough to accommodate additional requirements by potential tenants.
“More than 50 percent of our sites are backed up with diesel generators and scale power solutions,” the telecom giant said in its statement.