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Tag: AfDB

  • AfDB and rise of China

    AfDB and rise of China

    Devex  International Development, a media platform for global community, has said the involvement and investment of Asian countries in Africa’s development is widely acknowledged.

    “It has become a hotly debated topic, with many questioning whether all Asian aid and investment in Africa is benefitting the continent in a sustainable manner,” it said.

    According to it, while there is a general consensus that the role of Asian organisations in driving Africa’s development is growing, there is little publicly available data to understand this growth. “Opacity of aid and investment flows, especially from the heavyweight Chinese economy, makes it difficult to analyse the phenomenon,” it said.

    The body averred that many organisations are working to plug this data gap. “McKinsey’s recently released report on Chinese-African economic ties draws on hundreds of boots-on-the-ground observations and interviews with business leaders; and AidData’s carefully crafted methodology for tracking aid flows from less transparent donors, has allowed it to produce a large dataset on Chinese development financing flows.

    “As part of our African Development Bank (AfDB) contractor insights series, Devex can shine light on one aspect of this phenomenon: the growing success of Asian firms in winning AfDB contract awards.

    “While AfDB projects constitute only a portion of development activity in Africa, the market for AfDB contracts might serve as microcosm of African development, through which we can observe Asia’s growing presence on the continent,” it added.

  • AfDB approves $55m for solar projects

    AfDB approves $55m for solar projects

    The Board of Directors of the African Development Bank (AfDB) Group has approved three senior loans for a total amount of $55 million to finance three solar PV Projects under the second Round of the Feed-in-Tariff (FiT) Programme in Egypt.

    Alcazar Energy Egypt Solar 1 (Alcazar I), Delta for Renewable Energy (Delta) and Shapoorji Pallonji Energy Egypt (SP), are the three independent power producers benefiting from the loans for a tenor of eighteen years. Alcazar I and Delta will be extended a loan of $18 million each. The $19 million loan to SPEE also includes a $7 million concessional financing from the Global Environment Fund (GEF).

    The GEF financing is mobilised within the framework of the “AfDB-PPP Public-Private Partnership Program,” which was approved by the GEF for implementation by the AfDB to promote the scaling up of renewable energy technologies and contribute to the delivery of universal power supply in Africa. The Project is aligned with the GEF6 climate change mitigation focal area – promote innovation, technology transfer, and supportive policies and strategies. It is estimated that the GEF investment will enable the reduction of 61,000 tons of CO2 per year.

    Egypt has one of the best solar resources in the world, with daily sunshine averaging 9-11 hours, low humidity, and global horizontal irradiation of around 2230-2330 kilowatt-hour (“kWh”)/m2 per year.

    In order to meet the increasing energy demand, diversify the energy mix, and improve the environmental and climate footprint of the power sector, Egypt has developed an overarching regulatory framework for the development of renewable energy capacity with the aim of securing 20 per cent of its energy generation from renewable sources by 2022. In September 2014, Egypt launched a FiT Program for a total of 4,300MW including 2,300MW of solar PV.

    Under the aegis of the New Deal on Energy and in line with its key High 5s on Power & Light Up Africa, the AfDB Board approved the financing of three projects with a total installed capacity of 150MW being developed by two sponsors, Alcazar Energy Partners (2x50MW) and Shapoorji Pallonji (50MW). All three projects are located at the same site, on unoccupied desert land in Benban, 40 km north of Aswan. They will utilise a common grid connection funded jointly with other developers under a Cost Sharing Agreement with the Egyptian Electricity Transmission Company (EETC). With a financial close expected by 28 October 2017, the plants shall be operational by the end of 2018.

    Commenting on the project, Vice President for Power, Energy, Climate Change and Green Growth Complex (PEVP) Amadou Hott said: “The three Projects will increase Egypt’s power generation capacity, diversify its energy mix, enable significant fuel savings and reduce carbon emissions to the tune of 4.8 million metric tons over the PPA’s 25-year term.

  • AfDB releases report on capital flows

    The African Development Bank (AfDB) and the Climate Investment Funds’ Forest Investment Program (CIF FIP) have released a report on how unlocking capital flows to foster forest sector development in Africa.

    The report builds on the results of the first African Forestry Investment Conference (AFIC) organised by AfDB in June this year in Accra, Ghana. Attended by over 70 participants, the conference highlighted the benefits of forestry investments in Ghana and in West Arica.

    African countries have experienced the world’s most extreme land degradation through deforestation and this is seriously impacting Africa’s economic development, and compromising the continent’s resilience to climate change. Forestry is historically and currently a critical sector for Ghana, supporting the livelihood of a significant part of its population but Ghana’s forest resources have over the last decades been depleted at an alarming rate. Sustainable forest management is therefore important to curb this trend and keep Ghana on the path to green growth. The sector requires long term funding but currently attracts very limited private sector financing due mainly to perceived high risk and the nature of the financial market.

  • AfDB to invest $24 billion in Africa’s food sufficiency agenda

    AfDB to invest $24 billion in Africa’s food sufficiency agenda

    The African Development Bank (AfDB) plans to invest about $24 billion over the next 10 years to accelerate the realisation of the food sufficiency agenda, its president, Akinwumi Adesina, said yesterday.

    Adesina, who said the investment would require paying attention to the implementation of plans to achieve the green revolution in Africa.

    He said it would be through the Bank’s ‘Feed Africa Strategy’.

    Speaking in Abidjan, Côte d’Ivoire, ahead of the Seventh African Green Revolution Forum, AGRF, scheduled between September 4 and 8,  Adesina said the 2017 African Green Revolution Forum, AGRF would focus on “Accelerating Africa’s Path to Prosperity: Growing Economies and Jobs through Agriculture.”

    He said the AfDB was leading a campaign to unlock the continent’s food and agriculture market, projected to hit $1 trillion by 2030.

    “We must hurry. Africa’s time to become the global powerhouse for food and agriculture is now. We are already late,” the AfDB President said.

    At AGRF 2016, Adesina said many of Africa’s steadfast champions of agriculture had pledged over $30 billion in investments to increase production, income, and employment for smallholder farmers and local African agriculture businesses over the next decade.

    The Forum would be hosted by the Alliance for a Green Revolution in Africa, AGRA, an African-led institution focused on putting farmers at the centre of the continent’s growing economies, committed to investing in Africa’s agricultural transformation.

    AGRF’s partners include the AfDB, the African Union, the African Fertiliser and Agribusiness Partnership (AFAP), AGRA, the Food and Agricultural Organization of the United Nations (FAO) and the International Fund for Agricultural Development (IFAD).

    The other partners include Mastercard Foundation, the New Partnership for Africa’s Development (NEPAD), OCP Africa Group, The Rockefeller Foundation, the Southern African Confederation of Agricultural Unions (SACAU), Syngenta and YARA International.

  • Fitch affirms AfDB’s triple ‘A’ rating

    Fitch Ratings has affirmed the African Development Bank’s (AfDB) Long-Term Issuer Default Rating (IDR) at ‘AAA’ with a Stable Outlook.

    The leading global rating agency puts the bank’s Short-Term IDR at ‘F1+’ (best quality grade, indicating  a strong capacity to meet its financial commitments).

    In a statement, the agency said the ‘AAA’ rating primarily reflects extraordinary support from AfDB’s shareholders,which provides three-notch uplift over the bank’s intrinsic rating.

    “AfDB enjoys strong support from its 80 member states, which include 26 non-African countries with high average ratings. Callable capital subscribed by member states rated ‘AAA’, the largest of which are the US, Germany and Canada, accounts for 21 per cent of the total. This fully covered the bank’s net debt at end-2016, underpinning the ‘aaa’ assessment of shareholders’ capacity to support,” the statement said.

    The report underscores the strong propensity of member-states to support the bank in case of need as illustrated by previous capital increases and the bank’s important role in the region’s financing.

    Fitch maintains a fast growth in AfDB’s lending in the last two years has translated into a rapid increase in its indebtedness, noting that the bank’s management has indicated that if there is no clear evidence of a capital increase within the next two years, it will have no choice but to curb lending growth to preserve the bank’s solvency metrics.

    The report added that if no capital increase is approved by 2019, debt will not be covered by callable capital from ‘AAA’ rated countries, adding that this would place substantial pressure on Fitch’s assessment of extraordinary support and, hence on AfDB’s IDR.

    Fitch asserts that the relatively high risk profile of borrowers is mitigated by the preferred creditor status (PCS) that the bank enjoys on its sovereign exposures.

    Fitch assesses AfDB’s liquidity at ‘aaa’, which reflects excellent coverage of short-term debt by liquid assets (2.9x).

    But, Fitch notes that the share of the portfolio invested in securities or bank placements rated ‘AA-’ or above (83 per cent in 2016) is declining, though their quality is still assessed at excellent.

    Fitch said management intends to rebalance the treasury assets portfolio to increase the proportion of assets rated ‘AA-’ or above. This would help underpin Fitch’s assessment of the strength of extraordinary support, given the relevance of liquid assets’quality to the net debt calculation.

    “The -1 notch adjustment to AfDB’s solvency stemming from our assessment of its business environment reflects the high risk operating environment in which the bank operates,” the report says.

     

  • AfDB to invest $24b in agric

    AfDB to invest $24b in agric

    The African Development Bank (AfDB) will invest $24 billion in agriculture as part of its Feed Africa programme – a strategy for agricultural development in Africa.

    Its President, Akinwumi Adesina, said this known at the 50th anniversary celebration of the International Institute for Tropical Agriculture (IITA), Ibadan, Oyo State.

    He said the goal of the bank is to “ensure that Africa feeds itself within 10 years, and unlocks the full potential of its agriculture”.

    IITA recognisedAdesina’s immense contributions to improving agriculture and named a newly constructed building after him.The $700,000 AkinwumiAdesina Youth Agripreneurs Building is a new Training Facility for Capacity Development for Youth Agripreneurs funded by the Federal Ministry of Agriculture and Rural Development and IITA.

    The training facility comprises two major training rooms that can conveniently accommodate 50 trainees each, two big offices for 30 interns each, and 20 standard sized offices.

    “I am humbled, and deeply appreciative of the opportunity to lend my name to this well-equipped building which will be used by young agripreneurs to learn, set up and launch their own businesses, and create a prosperous living for themselves, their families and those they will employ,” Adesina said

     

    He re-affirmed his conviction that the future millionaires and billionaires of Africa will emerge from the agriculture sector. “Africa is today spending $35 billion a year importing food. That is $35 billion that should be kept on the continent. This is a $35 billion market that young people can tap into to create new wealth each year. To do that requires totally changing the lenses with which we look at agriculture. Agriculture should no longer be seen as a way of life or a development sector, but rather as a business for wealth creation,” he said.

  • AfDB to invest $12billion to boost energy in Africa

    African Development Bank (AfDB) has hinted of plans to invest the sum of $12billion to tackle the perennial energy crisis In Africa.

    Giving this hint was the AfDB President, Dr. Akinwunmi Adesina.

    According to him, the bank is investing $12billion in the energy sector on the continent for the next five years to leverage the $45-50billion required for energy development.

    While lamenting that about 645 million Africans do not have access to power, Adesina disclosed that the AfDB provided $1.7billion in financing energy and help provide electricity for over three million people.

    Speaking in Lagos at the launching of two books titled, ‘Transformative Paradigms in African Development” and “A Journey in African Development’ written by Chief Bisi Ogunjobi, a former Vice President of AfDB, Adesina who lamented that the intractable energy crisis has continued to have adverse effect on the continent, said African leaders must do everything within their powers to address the problem.

    “The development of the private sector is crucial for African economies. The bulk of the private sector accounted for by small and medium scale enterprises, which lack financing to grow their businesses and their challenges are compounded by structural factors such as lack of electricity that drives up their cost of doing business.

    “Unlocking access to affordable financing, reducing over-taxation and addressing the problem of power will unleash the incredible potential of the private sector, (hence) AfDB is supporting various countries’ efforts at power generation and distribution by investing huge sums money to take the continent out of darkness.

    “In Nigeria, we provided $200million to support the Nigeria Electricity Trader to float bonds to address the challenges in the power sector. We supported the construction of Morocco’s Noor Ouzazarte, the largest concentrated solar power in the world, and also supported the development of the Lake Turkana Wind Power Project, the largest in Africa,” he said.

    “Two weeks ago,” he said, “at the margins of the African Union Summit in Addis Ababa, AfDB also ” signed a new $6billion energy financing facility to be provided by Japan to support power system, transition including clean coal technology” for the continent.

    Author of the book, Chief Ogunjobi who spent over 30 years of senior management and professional experience in national and international banking said the books look at the impact of the continent’s myriads of socio-economic development problems and offer solutions.

     

  • AfDB seeks increase of MSMEs lending to $135b

    AfDB seeks increase of MSMEs lending to $135b

    The African Development Bank (AfDB) has called on financial credit providers to increase lending to Micro, Small and Medium Enterprises (MSMEs) in Africa to $135 billion.

    A statement endorsed by  its Communications Officer, Mr Emeka Anuforo, in Abuja yesterday said increasing affordable loans would promote the growth of MSMEs on the continent.

    The statement quoted AfDB President,  Dr. Akinwumi Adesina as saying that although Africa had the highest percentage of adults starting or running new businesses in the world, the productivity nonetheless remained low.

    Adesina solicited a holistic policy approach to strengthen entrepreneurship to facilitate Africa’s industrialisation and tackle the myriad financial constraints facing small-scale businesses.

    “The entrepreneurial culture is vibrant, with about 80 per cent of Africans viewing entrepreneurship as a good career opportunity.

    “New industrialisation strategies should focus on leveraging this dynamism and targeting the continent’s fast-growing private enterprises which have potential to create quality jobs.

  • AfDB spends $1.6b on transport, ICT projects

    AfDB spends $1.6b on transport, ICT projects

    THE African Development Bank (AfDB) has spent $1.6million on transport and Information Communication Technology (ICT) projects, designed to improve the lives of about  20 million Africans in the next few years.

    This was made known in its Annual Report on Infrastructure, Cities and Sustainable Development Department released at the weekend.

    The cash, it said, was allocated last year to 15 countries to finance projects, such as international roads systems, railway lines, urban infrastructure and other projects related to new ICT technologies.

    With these projects, the global portfolio of transport and ICT projects under implementation in 47 countries hit $11.8 billion.

    “Transport and ICT play a pivotal role in the pursuit of the bank’s five operational priorities, particularly in supporting industrialisation, regional integration, agriculture modernisation and for the overall improvement of the living conditions of Africans,”explained the Director of the Bank’s Infrastructure, Cities and Sustainable Development Department, Mr. Amadou Oumarou

    The report features the various projects using infographics and maps to help explain how each project is integrated into its specific geographic and economic context.

    For example, the Mueda-Negoman road opened the first paved link between Mozambique and Tanzania, and will connect with other roads financed by the AfDB in the region. The Trans-Saharan fibre optic backbone will connect Chad and Niger with neighbours, strengthening internet access in particularly remote areas. The report explains how the projects being financed contribute to regional integration across the continent. This year, the approved projects will finance the paving 1120 km of roads and laying 2060 km of fibre optic cable.

    The document also described the bank’s holistic approach: the financing of each infrastructure project is accompanied by measures designed to stimulate economic activity and improve the well-being of the people in the project areas.

    A road project connecting Rwanda and Uganda includes the launch of a training for 1,600 women who make their living through cross-border trade, the construction of two markets near the border crossing and support to seven local associations.

    Notably are projects to provide better access to isolated areas of Cameroon and Southern Ethiopia, accompanied by strong support for agricultural development and construction of health and education infrastructure.

  • Afe Babalola varsity gets AfDB’s $40m loan

    Afe Babalola varsity gets AfDB’s $40m loan

    The African Development Bank (AfDB) has signed an  agreement with Afe Babalola University (ABUAD), Ado-Ekiti, Ekiti State for a corporate loan to finance the institution’s expansion.

    A statement from the bank stated that the expansion plan consists of construction of new facilities – including a 400-bed teaching hospital, an industrial research park, a post-graduate school, student hostels, a central library and a small-scale hydropower installation.

    The signing ceremony was held at AfDB premises in Abuja with representatives of the university and other lending partners (WEMA Bank, Sterling Bank, UBA, Union Bank and legal partners Templars) in attendance.

    The continental bank said the university’sVice Chancellor, Prof. Micheal Oluwafemi Ajisafe, explained that the expansion will improve access to high quality education to over 10,000 students, create 250 new staff positions as well as about 1,000 temporary jobs across the construction, supplies and consulting in the value chain.

    In addition, full/partial scholarships and other forms of substantial financial aid will be provided to over 500 student beneficiaries.

    With emphasis on life skills, leadership skills and entrepreneurial skills, the university will generate over 12,000 high quality and employable graduates by the end of the loan life, in addition to over 2,400 trained farmers, who will benefit from the university’s farmers training and entrepreneurial programmes.

    The industrial research park is expected to galvanise the interest of industrialists and investors to establish SME industries in Ekiti State and improve the state’s revenues by over N50 million annually.

    AfDB Nigeria Senior Director Ebrima Faal hailed the project’s design, which he said thoroughly fits into the bank’s High5 priorities by contributing to improve the quality of life for the people of Africa through high-quality tertiary education, job creation and health service provision; fostering industrialisation through its industrial research park, powering Africa through its off-grid renewable Small Hydro Power (SHP) scheme and feeding Africa through its support to local farming businesses.

    Faal also highlighted the alignment of the project with two core focus areas of the bank’s Ten Year Strategy, namely skills & technology and private sector development.

    ABUAD Bursar Pastor Modupe Babalola assured AfDB and other lenders of the university’s commitment that the project funds will be administered with honesty, transparency and accountability.

    These, he said, were among the institution’s core values.