The African Development Bank Group (AfDB) has signed a $350 million credit facility with the Japan International Cooperation Agency (JICA) to finance private sector operations in Africa.
The loan is under the Enhanced Private Sector Assistance (EPSA) initiative, which is a component of Japan’s Official Development Assistance to Africa.
It is a new facility under the larger $4 billion signed by JICA in August last year in Tunis, making it the fifth version of EPSA.
“JICA’s support would be crucial in implementing the Special Agro-processing Industrial Zones, which will be the biggest game changer of Africa’s agriculture.
It will transform rural economies, reduce food losses, process and add value to crops produced in rural areas and create jobs,” said AfDB President Dr. Akinwumi Adesina who was in Japan for an official visit.
In addition, AfDB and JICA signed EPSA’s fifth version at the Eighth Tokyo International Conference on African Development (TICAD8), in August last year in Tunis.
AfDB, JICA Joint support
JICA’s President Dr. Tanaka Akihiko termed the loan as crucial step in Japan’s effort to work with AfDB to support Africa as it faces multiple crises, including access to credit.
“Although the private sector has been confronting unprecedented economic and social pressures, we are confident that the Bank’s Non-sovereign Operations supported through this concessional loan will play an essential role in addressing these pressing issues,” Akihiko said.
Dr. Adesina rallied Japan to facilitate interaction between its university students and ones in Africa to foster knowledge exchange and skills.
Moreover, JICA agreed to hold discussions with the AfDB on digitization of primary healthcare operations, and the establishment of the African Pharmaceutical Technology Foundation in Rwanda’s capital, Kigali later this year.
AfDB and JICA signed the first private sector assistance loan in 2007. To date, the Bank and the government of Japan have signed eight non-sovereign loans totaling $1.85 billion.
Equally important, the loans have supported 51 projects, mainly credit lines and equity to regional development finance institutions, private equity funds, and project finance for infrastructure public-private partnerships.
Japan is among AfDB’s most prominent supporters, contributing to the bank’s largest ever General Capital Increase in 2019.
Besides, in December 2022, Japan provided $534 million to the African Development Fund’s $8.9 billion sixteenth replenishment.