Japan, AfDB in US$3.5bn private sector boost
Japan and the African Development Bank (AfDB) on Friday announced a joint target of US$3.5bn to spur private-sector-led sustainable and inclusive growth in Africa.
The support will come under the Enhanced Private Sector Assistance for Africa initiative (EPSA4).
Japan and AfDB will contribute US$1.75 billion each, from 2020-2022, to enhance the fourth phase of EPSA.
“Building on the successful achievements so far, Japan and the Bank have decided to upgrade EPSA in both quality and quantity to meet financial needs for infrastructure development as well as for the private sector development in Africa,” Japan’s State Minister of Finance Keisuke Suzuki said at the EPSA4 launch ceremony held in Yokohama and attended by government officials and a high-level delegation from the Bank as well as representations of the business community.
“I wish that the new EPSA initiative will lead to business, investment promotion, and job creation in Africa.”
Electricity, transportation, and health will be key priorities under EPSA4. Projects and programmes for the three key priorities will be formulated and implemented in line with the G20 Principles for Quality Infrastructure Investment and G20 shared understanding on the importance of universal health care financing in developing countries. African countries will also be provided with support to improve and create conducive business environments to attract private investments.
“The African Development Bank and the Japan International Cooperation Agency (JICA) are long-term partners for promoting the development of Africa. EPSA helps to deliver much needed to support the private sector,” said Akinwumi Adesina, AfDB president.
During the initial phase of EPSA (2005-2011), Japan set the target of providing US$1 billion in loans and US$2bn under the second phase which ran from 2012 to 2016. Japan and AfDB are cooperating closely to provide the targeted joint amount of US$3bn under the ongoing EPSA3 (2017-2019).
Adesina said the increase in the support to the private sector under EPSA4 is “what we need to meet the needs of Africa”.
“Increase is what we need to build upon the solid foundations of co-financing over the last 13 years, and deliver even greater and more impactful development results in the years ahead,” Adesina said.
EPSA has three components—the Accelerated Co-Financing Facility for Africa (ACFA), the Non-Sovereign Loan (NSL) and the Fund for African Private Sector Assistance (FAPA).
ACFA is a sovereign co-financing arrangement between AfDB and JICA, under which JICA lends on concessional terms to borrowers under this scheme. NSL is a line of credit from JICA to the bank on concessional terms to help fund private sector operations.FAPA is a Multi-Donor Trust Fund for technical assistance and capacity building for AfDB’s public and private sector clients. The Government of Japan is the major contributor to the Fund, managed by AfDB.
