The European Investment Bank, (EIB) has signed a fresh EUR200 million loan agreement with the African Export Import Bank( AFREXIM)
The facility is to last for fifteen years and is aimed at supporting trade-related productive investments, including renewable energy projects in Africa. The facility will support promoters in more than 40 countries across Africa with long-term funding.
AFREXIM Bank authorities said By improving access to finance for private enterprises, and specifically SMEs and Mid-caps, the facility will enhance Intra-African trade as well as trade with the European Union.
“It will enable smaller companies to sustain and create new jobs and will ultimately stimulate the expansion, diversification and development of African trade. At least 25% of this financing will be dedicated to projects which will help to diversify the power mix in the region, reducing reliance on fossil fuels and supporting climate goals”, the bank said.
Speaking at the Africa Day event, jointly hosted by the EIB and the United Nations Industrial Development Organisation (UNIDO), President of the European Investment Bank, Werner Hoyer, said: “The EIB, as the EU Bank, is committed to supporting investment in Africa that unlocks economic opportunities, creates jobs and tackles a changing climate. As one of the largest multilateral financial
institutions, the EIB has a crucial role to play to help channel private capital towards the energy transition. This is urgent if we want to achieve the Paris Agreement and the Sustainable Development Goals. With this operation, Afreximbank and the EIB are joining forces to improve access to clean energy across Africa”.
On the potential benefits of the credit,AFREXIM BANK President, Professor Benedict Oramah. said “We are confident that effective implementation of this facility, which heralds Afreximbank’ s financing of climate action projects in Africa, will lead to strong development outcomes, including employment creation, increased economic activities, and increase in tax revenues for fiscally strained governments.”
According to him, ,AFREXIM, decided to conclude the facility in furtherance of its current strategy which prioritises Intra-African trade; intra–African investments, industrialisation and export manufacturing of the labour intensive type.