AFRICA – Africa Development Bank Group (AfDB) through its concessional financing window, the African Development Fund (ADF) has approved loans amounting to US$37.2 million to cover related credit risk for projects such as agriculture and the small and medium enterprises (SME) in Kenya, Sudan and Senegal.
The ADF provides low income Regional Member Countries (RMCs) with concessional loans and grants, guarantees as well as technical assistance for studies and capacity building in support of projects and programs that spur poverty reduction and economic development.
“The board of directors of the African Development Fund (ADF), the concessional window of the African Development Bank Group, approved on January 15, 2020, credit risk participations by the Private Sector Credit Enhancement Facility (PSF) for projects in Kenya, Sudan and Senegal,” said the bank in a statement.
“The agreement covers operations cumulatively valued at US$37.2 million and includes a corporate loan to support an East African agribusiness firm’s domestic and regional expansion and two lines of credit targeting SME borrowers.”
The bank, however, did not give a breakdown of the specific amounts to go to each country.
Launched in 2015 by the ADF, the PSF provides credit risk participations in low-income countries and is well on its way to building a US$1.5 billion portfolio of exposures. This means it acts as an insurance facility for loans.
“The approval of these operations brings the PSF’s total portfolio to US$733.25 million, comprising risk exposures in 47 operations amounting to roughly US$2.6 billion of total on non-sovereign operations (NSO) loans,” said the bank.
Under the NSO policy, the bank may provide financing or investment without a sovereign or State guarantees to private and public entities that meet specific eligibility requirements.
“We continue to advance the African Development Fund’s mission to strengthen development impact by creating opportunities for the private sector to invest in low-income countries,” said PSF administrator Cecile Ambert.
The bank said the approved operations were selected because of high potential to increase food production, deepen regional trade, and spur job creation, particularly for women and young entrepreneurs.
In other developments, the African Development Bank’s Board of Directors approved a US$60m loan to Elnefeidi Group Holding Company in Sudan earlier in the year to help finance its long-term agriculture and food expansion programme.
The planned expansion includes increasing agricultural productivity, enhancing related infrastructure, food processing and distribution.
It will directly contribute in developing Sudan’s livestock value chain (poultry and beef) by increasing the country’s export capacity for value-added livestock products.
In addition to that, they also approved a US$21.783 million grant to the government of Sudan to accelerate the adoption of solar-powered irrigation pumps in the country’s West Kordofan and North Kordofan states.
The project will enable farmers’ adoption of renewable energy technology through the installation of 1,170 photovoltaic (PV) irrigation pumps, the establishment of maintenance and repair workshops for the pumps, and the supply of equipment for a pump testing laboratory to provide certification and training.