African Development Bank Group and JICA Agree to Give Africa’s Private Sector a $350M Loan
The African Development Bank and the Japan International Cooperation Agency (JICA) have signed a $350 million loan agreement to support private sector operations in Africa.
This loan is part of Japan’s Enhanced Private Sector Assistance (EPSA) initiative, which is aimed at providing development assistance to Africa. The EPSA program, worth $4 billion, was signed by the Bank and JICA during the Eighth Tokyo International Conference on African Development (TICAD 8) in Tunis last August.
The loan agreement was signed at JICA’s headquarters in Tokyo between JICA President, Dr. Tanaka Akihiko, and the President of the African Development Bank Group, Dr. Akinwumi Adesina, who is in Japan to discuss investment opportunities in Africa with senior government officials, large Japanese companies, development partners, parliamentarians, and the African diplomatic corps.
Dr. Tanaka emphasized that the private sector in Africa is crucial in creating jobs for the continent’s prosperity and progress. He expressed confidence that the Bank’s Non-sovereign Operations supported through this concessional loan would play an essential role in addressing the pressing economic and social issues faced by the private sector in Africa.
Dr. Adesina thanked the government of Japan as well as JICA for their continued support to the Bank and Africa. He invited JICA to collaborate with the African Development Bank Group in other critical areas, such as refining the food and agriculture delivery compacts developed by African countries during a January food summit held in Senegal to tackle the continent’s food insecurity.
The loan agreement is expected to contribute to the implementation of the Special Agro-processing Industrial Zones, which will transform rural economies, reduce food losses, process and add value to crops produced in rural areas, and create jobs. The Bank is also establishing youth entrepreneurship investment banks to provide young people with financial and technical support throughout the business cycle.
The loan agreement marks the ninth non-sovereign loan signed between the Bank and the government of Japan. The loans have contributed to support 51 projects, mainly credit lines and equity to regional development finance institutions, private equity funds, and project finance for infrastructure public-private partnerships.
The EPSA program consists of three main components: a robust co-financing facility under the Accelerated Co-financing Framework Agreement; the Fund for African Private Sector Assistance, that has been critical in supplying technical assistance and expertise to project sponsors across Africa in various sectors, and the Private Sector Investment Finance.
The government of Japan is one of the Bank’s biggest supporters. It contributed to the Bank’s largest ever General Capital Increase in 2019 and provided $534 million to the African Development Fund’s $8.9 billion sixteenth replenishment in December 2022.
