AfDB, EU renew partnership to support business development in Africa

AFRICA – The African Development Bank and the European Union have reaffirmed their partnership towards supporting business development in the African continent.

Leaders from the two institutions shook hands on a renewed commitment to unlock hundreds of millions in financing for African infrastructure and development needs at the sidelines of the 2019 Africa Investment Forum.

According to an AfDB statement, collaboration between the two institutions would focus on de-risking the business environment in Africa, providing equity, guarantees and other types of non-grant support.

 African Development Bank President Akinwumi and European Union Commissioner Neven Mimica while speaking to journalists stressed on the central role of investment in the transformation of Africa.

Mimica said the EU whose goal is to move from billions to trillions in investment over the next decade, was encouraged by the Bank’s recent capital increase.

“The Bank is our strategic partner – it important that it is well capitalized,” Mimica said.

The leaders also spoke on several areas of collaboration, including EU commitment for investments in Africa and its role as a major partner of the Africa Investment Forum.

Mimica said that the EU would be supporting risk-sharing guarantees of 70 million euros and this is set to unlock hundreds of millions worth of investments, creating about 175,000 jobs in the continent.

He further added that the EU would disburse 60 billion euros over the next 5 years in one of the largest guarantee funds established so far, a move which he believes would result in the creation of 10 million jobs.

The EU also took a tranche of risk in Room2Run, the African Development Bank and partners’ innovative US$1 billion synthetic securitization of a portfolio of seasoned African Development Bank private sector loans.

Financial support from the EU has enabled the Bank to push through transformative initiatives such as PAGODA, which allows the institution to invest in infrastructure, especially in West Africa.

Through PAGODA, AfDB has been able to provide grants to low-income African countries, provide concessional loans, technical assistance, equity and guarantees to support sovereign and non-sovereign projects.

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