- AfDB has to date approved eight LoCs since 1972, totaling USD202million
- EADB ranks as Africa’s best performing development finance institution
- Businesses in Agro/Food processing, manufacturing and education sectors to benefit
The African Development Bank (AfDB) recently showed its continued commitment with a USD40milion, 10-year Line of Credit to the East African Development bank (EADB). This pledge will be directed towards support of regional infrastructure, manufacturing, agribusiness and education sectors with a bid to increase economic and government revenue growth in the member countries.
The East African Development Bank project pipeline comprises of 49 projects that are worth USD361 million with a track record of increasing profits gradually over the past 5 years. The bank increased its profits by 14 per cent in 2014 on a year on year comparison. In 2012, it increased profits to USD7.3 million from USD6.7M the previous year.
Mrs. Vivienne Yeda Apopo, Director General, East African Development Bank, pointed out that the received 8thLine of Credit from AfDB adds ready resources for the bank. Additionally, it contributes to increased financial strength, which has continuously led the bank to be recognized as Africa’s best performing development finance institution with a Ba3 rating.
“We however would still need to tap into debt and equity sources from Development Finance Institutions (DFIs) and commercial finance markets to meet the deficit fund remaining.” Mrs. Vivienne added.
Speaking at the signing ceremony, AfDB Regional Director for the East Africa Resource Center (EARC), Mr. Gabriel Negatu said that the bank was pleased to partner with EADB in its effort to close financial gaps in the region facilitating growth across sectors. This transaction aligns with several of AfDB’s policies and strategies including the Industrial Sector Policy Guidelines (1986), the Financial Sector Policy (2003), the Private Sector Operations Strategy, (2013) as well as the Eastern Africa Regional Integration Strategy (2010).
“This development is also in line with AfDB’s Ten Year Strategy which aims among other to deepen financial markets and promote inclusive growth. EADB plays a catalytic role in enhancing growth within the EAC region, supporting various programs within the region. The LOC will also complement AfDB’s recent equity investment of US$24 million, in addition to other ongoing interventions.” He noted.
AfDB and EADB’s 47 year partnership has lead to defined objectives for both banks with major focus on inclusive growth through private sector development, human capital development, gender equality, green growth and sustainable development in the Africa region.
About
East Africa Development Bank
East African Development Bank was created in 1967 under the Treaty for East African Cooperation, with EADB as the sub-regional multilateral lender. It is headquartered in Kampala, Uganda with offices in its other paid-up member countries of the EAC. Four members of the EAC, Kenya, Rwanda, Uganda and Tanzania, collectively own 85.9%of EADB’s paid-in capital with the fifth member, Burundi still to contribute to EADB’s capital. Several Development Finance Institutions (DFIs) own the remainder with AfDB being the largest single DFI equity investor in EADB. EADB’s interventions mainly take the form of loans, leases and equity participations and are geographically limited to member countries only.
Africa Development Bank
The African Development Bank Group (AfDB) is a multilateral development finance institution established to contribute to the economic development and social progress of African countries. The AfDB was founded in 1964 and comprises three entities: The African Development Bank, the African Development Fund and the Nigeria Trust Fund. The bank’s mission is to fight poverty and improve living conditions on the continent through promoting the investment of public and private capital in projects and programs that are likely to contribute to the economic and social development of the region. The AfDB is a financial provider to African governments and private companies investing in the regional member countries (RMC).