October 18, 2011
1. Yesterday, the Japan International Cooperation Agency (JICA) signed an agreement with the African Development Bank (AfDB) to provide a Japanese ODA loan of up to 8.44 billion yen for assistance for the Private Sector Assistance Loan under the Joint Initiative titled EPSA for Africa (III).
2. This project is being implemented as a part of Enhanced Private Sector Assistance for Africa (EPSA for Africa), announced by the Japanese government in June 2005. Under this project, JICA will provide funding, through AfDB, to African private sector with the aim of boosting economic growth, as well as to alleviating poverty in the region. This will be carried out through AfDB Private Sector Financing Operations for private companies and others located or registered in AfDB member nations in Africa region.
3. Following the first and second rounds of financing in February 2007 and September 2008, JICA has decided to provide this loan as the third round of financing to respond to the still remaining funding needs.
4. Although the average annual rate of economic growth in African nations reached 4.9 percent in 2010, that lags behind the seven percent needed to halve the impoverished population, which is one of the Millennium Development Goals, and so sustainable economic growth is being called for. To that end, private sector financing is required especially by informal micro, small and medium enterprises (MSMEs), that consist of the majority of the private sector in Africa and have constraints to access to necessary financing due to the inadequate banking mechanism.
5. Previous two rounds under EPSA include such loans to local MSME banks and Independent Power Producer for hydroelectric power plant, and a high level of project outcome has been confirmed in financing MSMEs and creating job-opportunities as producing 5,000 beneficiaries from MSME loans.
6. Based on this background, this third round loan to AfDB will also provide support to microfinance agencies targeting low-income households, support for local MSME banks, and financing for infrastructure projects through public-private partnerships (PPPs), that continuously support the growth of the private sector.
7. JICA recognizes private sector development as a priority area of its assistance along with the development of the agriculture sector and socioeconomic infrastructure. JICA is committed to continuously support African private sector going forward.
|Project title||Amount (million yen)||Annual interest rate (%)||Repayment (years)||Deferment period (years)||Procurement|
|Private Sector Assistance Loan under the Joint Initiative titled EPSA for Africa (III)||8,440||0.55||-||40||10||Untied|
African Development Bank
Private Sector Department (OPSM)
Address: B.P. 323, 1002 Tunis Belvedere, Tunisia
Phone: +216 (7) 110-2755, Fax: +216 (7) 183-4178