AfDB-Group, Japan signed exchange of notes for $350 million private sector assistance loan

Addis Ababa February 21, 2023 (FBC) – The African Development Bank and Japan have signed an exchange of notes for an eighth private sector assistance loan from Japan to finance the Bank’s private sector operations.

According to AfDB-Group the loan agreement, 350 million USD, carries an interest rate of 0.11% and a repayment period of 30 years, with a grace period of 10 years.

AfDB-Group sated the loan will contribute significantly to funding the Bank’s private sector operations through credit lines.

It said the signing took place at the Bank Group’s headquarters, between its Senior Vice President, Bajabulile Swazi Tshabalala, and Japanese Ambassador to Côte d’Ivoire, Katsuya Ikkatai.

It added the agreement comes under the joint initiative known as the Enhanced Private Sector Assistance Initiative for Africa (EPSA).

AfDB-Group indicated that the Bank and the government of Japan have signed seven non-sovereign loans totaling 1.5 billion USD.

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, AfDB-Group stated.

The government of Japan is one of the Bank’s biggest contributors, participating in the sixteenth replenishment of the African Development’s concessional window, the African Development Fund, in December last year. Japan also contributed to the African Development Bank’s General Capital Increase (GCI-7) in 2019, AfDB-Group further stated.

It is to be recall that during TICAD8 held in Tunis in August 2022, the heads of the Bank and JICA announced the fifth phase of EPSA, from 2023-2025.

It has a joint target of 4 billion USD, which is 500 million USD more than EPSA 4. An additional up to 1 billion USD will be provided by JICA under a new special window to promote debt transparency and sustainability reforms in Africa.

By: Yonathan Yoseph