Japan and ADF sign 73.6 billion yen loan agreement to support replenishment
The Japan International Cooperation Agency (JICA) and the African Development Fund (ADF) – the concessional arm of the African Development Bank Group (AfDB.org) – on Tuesday signed a loan agreement of $ 73.6 billion. Japanese yen ($ 668.1 million) to support the 15th replenishment of the African Development Fund (ADF-15).
During a virtual ceremony, the President of the African Development Bank Group, Dr Akinwumi A. Adesina and the Japanese Ambassador to Côte d’Ivoire, Kuramitsu Hideaki, signed an exchange of notes, while the The loan agreement was signed by the chief representative of JICA in Côte d’Ivoire, Fujino Kojiro. , and Swazi Tshabalala, Acting Senior Vice President of the African Development Bank Group, in her capacity as Chief Financial Officer.
The concessional donor loan will support the 15th replenishment of the African Development Fund, approved in December 2019 by ADF donor countries. JICA is providing the loan – the largest to ADF-15 – on behalf of the Government of Japan.
Ambassador Kuramitsu Hideaki, whose country was the fifth largest contributor to ADF in cumulative terms, said the loan was part of Japan’s commitment to promote industrial human resource development, innovation and investment, and to invest in quality infrastructure to improve connectivity, expressed at the TICAD 7 conference in August 2019. At the same conference, Japan also announced that it will contribute to phase 4 of the Enhanced Initiative of assistance to the private sector (EPSA), a flagship joint project with the Bank.
“I sincerely hope that this yen loan will enable the (African Development Fund) to execute concessional finance and grants for African countries facing the emerging challenges caused by COVID-19 and to contribute to the economic and social development of these country, ”he said.
JICA President Kitaoka Shinichi said, “The COVID-19 crisis has accelerated global structural changes. Africa is still in the midst of this crisis, facing serious challenges related to coronavirus variants and cold storage requirements for vaccines. Only a united Africa can overcome this threat. to humanity. We must not allow this virus to jeopardize the steady progress in freedoms, independence and democracy that African countries have made so far. I firmly believe that today’s contribution to ADF-15 will further strengthen our cooperation with African countries and strengthen our partnership with the African Development Bank Group.
Mimura Atsushi, ADF Deputy Director General, International Office, Ministry of Finance of Japan, said, “The African Development Fund is a key source of finance for low-income African countries heavily affected by COVID-19. The yen loan that we are providing today has a higher grant element than the yen loan provided for the last ADF replenishment, with a lower interest rate and a longer term. In the future, I would like to see our partnership develop further with the African Development Bank Group. “
Dr Adesina highlighted the African Development Bank’s long-standing partnership with the Government of Japan, including the Enhanced Private Sector Assistance Initiative, launched in 2005. As of February 2021, Japan’s total contribution to the The initiative amounted to $ 4.6 billion.
Adesina pointed out that Japan’s concessional loan represented nearly 10% of total ADF-15 resources of $ 7.5 billion. “This is a continuation of Japan’s leading role in granting concessional loans to the African Development Fund. replenishment, ”he said.
“Japan continues to add great value to the overall African Development Fund replenishment cycles,” Adesina said, adding that the latest loan “will significantly increase the cash flow of the African Development Fund and allow us to increase support. essential for FAD countries… especially now at this critical time when they are struggling to cope with and recover from the COVID-19 pandemic. “
By the end of the ADF-15 period (2020-2022), ADF projects are expected to have changed the lives of millions of Africans. Up to 28,000 km of new or improved power distribution lines will have been installed, around 9 million people will have better access to water and sanitation and up to $ 1.6 billion in revenue. business will have been generated through investments in micro, small and medium enterprises.
The Fifteenth ADF Replenishment will provide investments to help the poorest countries in Africa build their economic resilience and reduce their systemic vulnerability. It will pay particular attention to gender equality, climate change, the private sector and the promotion of the principles of good governance while emphasizing two strategic pillars: sustainable and quality infrastructure that reinforces integration. regional; and the development of governance and institutional capacities to stimulate the creation of decent jobs and inclusive growth.
The African Development Fund is made up of 32 contributing states. It benefits 37 countries, including fragile states that need special support to deliver basic services, and countries that have experienced higher growth rates in recent years. The resources of the Fund are replenished every three years.