AfDB sign exchange deal with Japan

The African Development Bank (AfDB) has signed a loan agreement with Japan to finance the Bank’s private sector operations. The exchange of notes for the eighth private sector assistance loan is valued at JPY 44.1 million or $350 million, with an interest rate of 0.11% and a repayment period of 30 years, including a 10-year grace period. f

The signing ceremony between the AfDB’s Senior Vice President, Bajabulile Swazi Tshabalala, and Japanese Ambassador to Côte d’Ivoire, Katsuya Ikkatai, took place at the Bank’s headquarters on 17 February. The agreement comes under the joint initiative known as the Enhanced Private Sector Assistance Initiative for Africa (EPSA), which provides financing for the Bank’s private sector operations through a line of credit from the Japan International Cooperation Agency (JICA) on concessional terms.

“This new arrangement which takes our collaboration forward, will build on the existing strong partnership we have had over the years and fits in firmly with the call and vision of our President Dr Akinwunmi Adesina to further strengthen our collaboration with Japan,” said Tshabalala following the signing.

The Japanese Ambassador noted that private investment is essential for Africa’s economic growth and inclusive and sustainable development, as highlighted in the Tunis Declaration adopted at the Eighth Tokyo International Conference on African Development (TICAD 8) in August 2022. The support signed today reflects the strong joint action of the Government of Japan and the AfDB, embodying exactly this policy of Japan, he added.

Japan has signed seven non-sovereign loans totalling $1.5 billion with the AfDB to date. These loans have supported 51 projects, primarily credit lines and equity to regional development finance institutions, private equity funds, and project finance for infrastructure public-private partnerships. During TICAD 8, the heads of the Bank and JICA announced the fifth phase of EPSA, from 2023-2025, with a joint target of $4 billion, which is $500 million more than EPSA 4. An additional up to $1 billion will be provided by JICA under a new special window to promote debt transparency and sustainability reforms in Africa.