Abidjan, Cote d’Ivoire, May 26,
2010—Eight development finance institutions, who last year invested
over USD 8.8 billion in projects across Africa, have agreed to increase
cooperation and co-financing of private sector projects across the continent.
The African Financing Partnership demonstrates their shared intent and
provides guidelines to jointly assess evaluate and finance projects. This
marks a significant development for effective use of donor resources in
Africa and aim to attract greater private sector investment for private
sector projects on the continent with strong development outcomes.
The eight participating institutions
with strong experience of operating in Africa are the African Development
Bank; Development Bank of Southern Africa; Deutsche Investitions-und Entwicklungsgesellschaft
(DEG); European Investment Bank; Netherlands Development Finance Company
FMO; Industrial Development Corporation of South Africa; IFC, a member
of the World Bank Group; and Proparco.
Donald Kaberuka President of the African
Development Bank said “The AFP is a major pillar in the partnership strategy
of the African Development Bank. I applaud the Private Sector department
for this initiative”. In 2009, he explained, “the DFIs worked collaboratively
on projects in Africa, including Main One Cable in Nigeria, to jointly
finance over US$ 1 billion in projects under partnership models”, adding
that “This year, the target for collaborative co-financing is manifold,
including financing projects in countries such as Sierra Leone and Côte
d’Ivoire. These projects are in sectors such as infrastructure,
power, renewable energy and agribusiness”. “Last year, the AFP was a
coordinating platform for the Joint IFI/DFI Action Plan to respond to the
financial crisis in Africa and with a target mobilization of US$ 15 billion,”
Dr. Kaberuka further explained.
“There is an evident need for partnerships
amongst development finance institutions, for efficient utilization of
our human and capital resources to meet vast financing needs of private
sector projects in Africa” African Development Bank Private Sector Director,
Tim Turner stated.
Admassu Tadesse, Group Executive Director,
DBSA International said, “The African Financing Partnership is a much
needed innovation in the way DFIs and financing institutions can work together
in the region. It has real potential to streamline and bolster development
financing to projects and entrepreneurs in the region. DBSA is keen and
DEG, the German development financing
institution, which, in 2009, had its best new business result in Africa
since its inception, has the ambition to further increase and enhance its
long lasting commitment to the private sector development on the African
continent. “This will be supported by an intensified cooperation between
likeminded institutions,” explained Winfried Nau, Head New Business Africa
at DEG. “AFP will help optimizing the promotion of much needed private
initiative for the sake of economic development,” he further stated.
"The European Investment Bank is
pleased to be a founding member of the African Financing Partnership. This
marks a key step in improving cooperation and increasing aid effectiveness
in the spirit of the Paris Declaration for the benefit of Africa. Last
year, nearly three quarters of all EIB projects in Africa were financed
with other partners, whose involvement and expertise increased both the
sector scope and number of investments across the continent" said
Plutarchos Sakellaris, European Investment Bank Vice President responsible
Jaap Reinking, Director, Global Partners
Department said, “FMO takes a strong interest in close co-operation with
our financial partners. Cooperation optimizes efficiencies and smoothens
processes for our clients. The AFP is an important initiative in achieving
such closer cooperation between the participating institutions”.
Ms. Lindi Toyi, Head of Public Private
Partnerships at the IDC said, “The IDC is proud to be a Promoting Partner
of the AFP and IDC looks forward to working with the other the Promoting
Partners within the AFP. The AFP will serve an important platform to mobilise
funding in a more coordinated fashion for projects in Africa.”
“IFC is deeply committed to increasing
cooperation with our partners through the African Financing Partnership.
Working together will enable IFC and its partners to have a greater impact
helping Africa fulfill its economic potential and ensure that more Africans
can build a better future,” said Thierry Tanoh, IFC Vice President responsible
The endorsement by the AFP Promoting
Partners indicates their common goal to work together on a mission of poverty
alleviation and private sector development in Africa. The partnership will
target financing of large-scale projects in infrastructure and industrial
sectors leading to economic growth and job creation. Smaller innovative
projects as well as investments in financial services, including SME and
microfinance projects may also be considered.
In practice the African Financing Partnership
will enable one institution to coordinate on behalf of the others, as Lead
Promoting Partner, and propose involvement of other institutions, thus
minimizing duplication of efforts such as due-diligence, appraisal and
excessive demand on the project sponsor. This will lead to greater efficiency,
common selection of external advisors and reduced borrowing costs.
The strategic development of the African
Financing Partnership will be determined by a committee comprising representatives
of all institutions and will act as a platform for co-financing private
sector projects in African countries defined as regional members of the
African Development Bank. Other development finance institutions or private
sector investors could join the initiative at a later stage.
IFC, a member of the World Bank Group, creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk mitigation
services to businesses and governments. Our new investments totaled $14.4
billion in fiscal 2009, helping channel capital into developing countries
during the financial crisis. For more information, visit www.ifc.org.