AFRICA – The African Development Bank Group (AfDB) has signed a memorandum of understanding (MoU) with the European Bank for Reconstruction and Development (EBRD) to promote sustainable private-sector development in Africa.
The MoU will catalyse new sources of financing to help bridge the US$2.5 trillion annual financing gap for development in Africa. This gap requires that development finance institutions work in partnership.
“The new partnership agreement between our two institutions will pave the way for us to do more together, especially in supporting the growth of Africa’s private sector,” said Dr Akinwumi Adesina, President of the AfDB.
“The impact of Covid-19 on government resources is huge and we need to mobilise more private resources to help African countries build back stronger.”
Odile Renaud-Basso – President, EBRD
The EBRD and AfDB will leverage their experience in global and regional financing to increase private sector financing in climate change mitigation, green and resilient infrastructure, and capital markets developments.
They will also work to improve business environments, bolster the real economy and mobilise private-sector investment. The loans will be directed towards the funding of renewable energy projects and other carbon emissions reduction initiatives.
“The Covid-19 crisis has made the need for better and closer collective action even more urgent. Over the years, collaboration between the EBRD and the AfDB has grown from strength to strength in the region,” EBRD President Odile Renaud-Basso said.
The African Development Bank and EBRD have a long history of cooperation. Last month, the two institutions signed a US$114 million financing package for the construction of the largest private solar plant in Egypt.
With COVID-19 disrupting Africa’s progress towards reaching the UN Sustainable Development Goals through its negative impacts on businesses and economies, partnerships between financing institutions especially large banks is vital to speed up recovery.
The participation of the private sector in infrastructure development projects in developing countries saw a huge decline in the first half of 2020 as a result of the pandemic, according to a World Bank report.