The Agence Française de Développement (AFD) signed a credit facility of USD 75 million and a grant support of EUR 0.5 Million with the Trade and Development Bank, on 12th April 2017 in Paris, to support its financing of infrastructure projects in Africa.
The Trade and Development Bank (TDB) and the Agence Française de Developpement (AFD) started their cooperation in 2012 with an initial technical assistance cooperation programme dedicated to the strengthening of TDB’s operations at the start of the 5th corporate plan.
“Today, our cooperation with AFD is consolidating and expanding with the signature of these two financing agreements. This long tenor financing will support TDB in the development of its project finance activities for better regional integration and competitiveness of TDB Member States in Eastern and Southern Africa,” said the President and Chief Executive Officer of TDB, Mr Admassu Tadesse.
The two agreements aim at supporting TDB, a leading regional development finance institution through a continental and Pan African approach. The credit facility of USD 75 million will be targeting infrastructure projects while the technical assistance grant aims at supporting TDB in its climate and green finance strategy development, while enhancing its infrastructure project finance activities, as well as implementing internal capacity building activities.
Mr Rémy Rioux, AFD Managing Director acknowledged, “Both AFD and TDB are members of the IDFC platform and we are looking forward to developing further our cooperation on green financing opportunities; we expect that AFD’s support will develop joint initiatives between our two organizations for infrastructure development in Africa, in transport, energy, water, sanitation, and ICT”.
This purpose of the project is to finance four to six strategic projects in the next four years in the COMESA, EAC and SADC regions, at consolidating TDB’s role and position for African infrastructure projects financing, and at developing further interactions between AFD and TDB.
The infrastructure needs of Sub-Saharan Africa will exceed USD 93 billion annually over the next ten years. To date, less than half of that amount is being provided, thus leaving a financing gap of more than USD 50 billion to fill. The poor state of infrastructure in Sub-Saharan Africa – the conditions of its electricity, water, roads and information and communications technology (ICT) – cuts national economic growth by two percent every year and reduces productivity by as much as 40 percent. To sustain economic growth and build sustainable development in Africa, building infrastructure to bridge this gap is vital.