| The new Compact offers a big boost to business development initiatives for the Bank’s non-sovereign portfolio in its Portuguese-speaking African member countries |
| The Board of Directors of the African Development Bank (www.AfDB.org) Group on Wednesday approved the Lusophone Compact Guarantee Program (LCGP or the Compact), with a maximum risk exposure of up to EUR400 million. The new Compact offers a big boost to business development initiatives for the Bank’s non-sovereign portfolio in its Portuguese-speaking African member countries. The program is designed for new non-sovereign operations (“NSOs”) in the Lusophone countries of Africa, notably Angola, Cabo Verde, Equatorial Guinea, Guinea- Bissau, Mozambique, and São Tomé and Príncipe, ( known as the PALOP), and enables the Bank to manage its risk capital over the next five years 2021-2025, while at the same time diversifying and growing its NSO portfolio over the medium to long-term. The Bank has been active in the development of specialized risk sharing vehicles, initiatives and programs which can facilitate the use of risk transfer on specific types of Bank portfolios or assets, and this program is expected to increase the number of private sector and Public Private Partnership (PPP) projects in the PALOP as well as trade between stakeholder countries. “Over the past five years, the Bank has been committed to exploring ways to increase its lending capacity while proactively managing its credit exposures and headroom more efficiently, and mobilizing additional financial resources and investors to the continent’s development,” Bank Vice President for Corporate Services, Mateus Magala, said. As the anchor member of the Lusophone Compact, the Government of Portugal would act as the guarantor of this program, for exclusive use by the Bank. The LCGP would allow for individual Bank projects to be covered for up to the full maturity of the loan (up to 15 years) and up to a maximum of 85% of the total Bank loan principal amount, in accordance with pre-determined eligibility criteria. The Guarantee forms a very important pillar of the wider Lusophone Compact aimed at promoting and enhancing the use of financing, risk mitigation and technical assistance instruments, to unlock private sector financing. The Lusophone Compact initiative is built on a five-year General Memorandum of Understanding (“MOU”) that was signed by the Bank, the Government of the Republic of Portugal (“GOP” or “Guarantor”) and the PALOP countries to attract and unlock private sector investment and trade in, and among PALOP nations. The initiative became effective in December 2018. The PALOP remain the least economically integrated within their respective geographical regions and despite their deep shared history, even among themselves. This new Guarantee Compact is seen as a valuable tool that will serve as an additional instrument to intensify the Bank’s efforts in the financing of critical transformative NSOs in the African Lusophone countries. The program complements other Bank initiatives to support member countries to strengthen their investment climates, increase investments and to facilitate pipeline development. “Given the adverse impacts that the COVID-19 pandemic has had on the African continent and the need to build resilience as fiscal pressures rise, the private sector plays a critical role in the process of economic recovery. Initiatives such as the LCGP will play a strategic role in equipping the Bank through a programmatic guarantee to avail headroom to contribute to boosting economic resurgence in these countries,” Samuel Mugoya, Bank Director, Syndication, Co-financing and Client Solutions, noted. |
African Development Bank
African Development Bank approves $27.33 million to ramp up the African Union’s COVID-19 Response Initiative
The African Development Bank’s Board of Directors (www.AfDB.org) on Wednesday approved $27.33 million in grants to boost the African Union’s (AU) efforts to mobilize a continental response to curb the COVID-19 pandemic.
The approval follows a meeting of the extended Bureau of the Conference of Heads of State and Government with Africa’s private sector on 22 April 2020, chaired by H.E. Cyril Ramaphosa, President of South Africa and chairperson of the AU, at which the Bank’s President, Akinwumi Adesina, pledged strong support for the AU’s COVID-19 initiative.
The AU Bureau meeting called for contributions to the African Union’s COVID-19 Response Fund established by the AU Commission chairperson, Mr. Moussa Faki Mahamat, in March 2020.
Speaking after the Board approval of this operation, President Adesina said: “with this financing package, we are reaffirming our strong commitment to a coordinated African response in the face of COVID-19. Most importantly, we are sending a strong signal that collectively, the continent can address the pandemic, which is straining health systems and causing unprecedented socio-economic impacts on the continent.”
The Bank’s grant financing will support the Africa Centers for Disease Control and Prevention (Africa CDC) in providing technical assistance and building capacity for 37 African Development Fund (ADF) eligible countries, particularly the Transition States, to combat the COVID-19 pandemic and mitigate its impact. The ADF is the Bank’s concessional window.
Sourced from the ADF’s Regional Operations/Regional Public Goods envelope and the Transition Support Facility, these two grants will support the implementation of Africa CDC’s COVID-19 Pandemic Preparedness and Response Plan through strengthening surveillance at various points of entry (air, sea, and land) in African countries; building sub-regional and national capacity for epidemiological surveillance; and ensuring the availability of testing materials and personal protective equipment for frontline workers deployed in hotspots. The operation will also facilitate collection of gender-disaggregated data and adequate staffing for Africa CDC’s emergency operations center.
At the beginning of February 2020, only two reference laboratories—in Senegal and in South Africa—could run tests for COVID-19 on the continent. The Africa CDC, working with governments, the World Health Organization, and several development partners and public health institutes, have increased this capacity to 44 countries currently. Despite this progress, Africa’s testing capacity remains low, with the 37 ADF-eligible countries accounting for only 40% of completed COVID-19 tests to date.
“Our response today and support to the African Union is timely and will play a crucial role in helping Africa look inward for solutions to build resilience to this pandemic and future outbreaks,” said Ms. Wambui Gichuri, Ag. Vice President, Agriculture, Human and Social Development.
This support will complement various national and sub-regional operations financed by the African Development Bank under its COVID-19 Response Facility to support African countries to contain and mitigate the impacts of the pandemic.
African Development Bank partners with Alliance for a Green Revolution in Africa as sponsor of virtual African Green Revolution Forum (AGRF)
The African Development Bank (https://www.AfDB.org/en) returns as a top-tier partner of the African Green Revolution Forum (AGRF) – Africa’s largest agriculture conference – to be held online for the first time from 8-11 September 2020, in light of the COVID-19 pandemic.
The tenth annual AGRF will be headlined by African Heads of State and Government, and will bring together delegates from governments, civil society, the private sector and research communities. AGRF 2020 is hosted by the Government of Rwanda and the AGRF Partners Group, organized under the theme Feed the Cities, Grow the Continent. Leveraging Urban Food Markets to Achieve Sustainable Food Systems in Africa.
“As COVID-19 causes disruptions across Africa, we must prioritize policy support, especially for small and medium enterprises that produce, process and market 60% of food consumed on the continent,” said Wambui Gichuri, Bank Acting Vice President for Agriculture, Human and Social Development. “We need to enhance movement of inputs and food, increase production of and access to healthy and nutritious foods, establish food security task forces in countries, as well as strengthen regional organization capacity to monitor multi-country initiatives. AGRF is the platform to move these policy conversations forward.”
Acting Vice President Gichuri leads the Bank’s “digital delegation” to AGRF, which also includes Atsuko Toda, Director for Agricultural Finance and Rural Development; Martin Fregene, Director for Agriculture and Agro-industry; Esther Dassanou, Coordinator of the Bank’s Affirmative Finance Action for the Women of Africa initiative (AFAWA) (https://bit.ly/2Fgoovr), and Edson Mpyisi, Coordinator of the Bank’s Enable Youth program. The Bank delegation will take part in nine AGRF sessions.
Edson Mpyisi
Gichuri is scheduled to deliver remarks during a nutrition-themed plenary: Building Back Better – Growing the Continent. This policy symposium held Wednesday (16:00 CAT) will discuss the UN’s The State of Food Security and Nutrition in the World, the ongoing pandemic, and feeding the continent.
Director Toda will moderate a Bank-organized AGRF side event on Monday, 7 September (15:00 CAT). The session, Integrating African Food Systems through the Lens of SME Champions will amplify the voices of small and medium enterprises in the production, processing, logistics, and cold chain solutions sub-sectors.
“Feeding Africa’s growing population is not just about producing more food. It’s also about getting food to people who need it most. We support entrepreneurs along food system value chains helping to make that happen,” Toda said.
Fregene will be a panelist at an AGRF pre-event, Scaling Up, starting at 15:00 CAT on Monday, and he will speak during another pre-event session, Agriculture Technologies for Feeding Cities AGRF at 17:00 CAT on the same day.
Mpyisi will help judge the AGRF Agripreneur Competition Finale parallel session on Tuesday. The competition brings together young entrepreneurs, innovators and “movers and shakers” in Africa’s agri-food sector. Mpyisi will also serve as a panelist on the Strengthening the Ecosystem for Young African Agripreneurs session, which will look at action plans on how to better serve the needs of young agripreneurs.
AFAWA Coordinator Dassanou will join a panel of experts discussing Making the Most of Gender-Based Financing on Wednesday, 9 September. The session will home in on the methods needed to identify and fund women entrepreneurs who are part of the hidden middle that links farmers to the value-added processing, retailing and food service sectors in urban centers across the continent.
“Agriculture and strengthening food systems are cornerstones of Africa’s plan to build back better coming out of the COVID-19 pandemic,” said Fregene. “AGRF online will convene the most senior decision-makers of governments in the same digital space as grassroots players along the agricultural value chain – we at the Bank are proud to be part of it,” said Fregene.
10th Ebola outbreak in the Democratic Republic of the Congo declared over
The long, complex and difficult Ebola outbreak in the Democratic Republic of the Congo (DRC) has been overcome due to the leadership and commitment of the Government of the DRC, supported by the World Health Organization (WHO), a multitude of partners, donors, and above all, the efforts of the communities affected by the virus.
The virus was declared over on Thursday. The WHO congratulates all those involved in the arduous and often dangerous work required to end the outbreak, but stresses the need for vigilance. Continuing to support survivors and maintaining strong surveillance and response systems in order to contain potential flare-ups is critical in the months to come.
“The outbreak took so much from all of us, especially from the people of DRC, but we came out of it with valuable lessons, and valuable tools. The world is now better-equipped to respond to Ebola. A vaccine has been licensed, and effective treatments identified,” said WHO Director-General Dr Tedros Adhanom Ghebreyesus.
“We should celebrate this moment, but we must resist complacency. Viruses do not take breaks. Ultimately, the best defence against any outbreak is investing in a stronger health system as the foundation for universal health coverage.”
The outbreak, declared in North Kivu on 1 August 2018, was the second largest in the world, and was particularly challenging as it took place an active conflict zone. There were 3470 cases, 2287 deaths and 1171 survivors.
Led by the DRC Government and the Ministry of Health and supported by WHO and partners, the more than 22-month-long response involved training thousands of health workers, registering 250 000 contacts, testing 220 000 samples, providing patients with equitable access to advanced therapeutics, vaccinating over 303 000 people with the highly effective rVSV-ZEBOV-GP vaccine, and offering care for all survivors after their recovery.
The response was bolstered by the engagement and leadership of the affected communities. Thanks to their efforts, this outbreak did not spread globally. More than 16 000 local frontline responders worked alongside the more than 1500 people deployed by WHO. Support from donors was essential, as was the work of UN partner agencies, national and international NGOs, research networks, and partners deployed through the Global Outbreak Alert and Response Network. Hard work to build up preparedness capacities in neighbouring countries also limited the risk of the outbreak expanding.
Work will continue to build on the gains made in this response to address other health challenges, including measles and COVID-19.
“During the almost two years we fought the Ebola virus, WHO and partners helped strengthen the capacity of local health authorities to manage outbreaks,” said Dr Matshidiso Moeti, WHO Regional Director for Africa.
“The DRC is now better, smarter and faster at responding to Ebola and this is an enduring legacy which is supporting the response to COVID-19 and other outbreaks.”
As countries around the world face the COVID-19 pandemic, the DRC Ebola response provides valuable lessons. Many of the public health measures that have been successful in stopping Ebola are the same measures that are now essential for stopping COVID-19: finding, isolating, testing, and caring for every case and relentless contact tracing.
In DRC, community workers were provided with training and a smartphone data collection app that enabled them to track contacts and report in real time rather than fill in laborious paper reports. Even when violence locked down cities, the community workers, many of them local women, continued to track and trace contacts using the application, something that was crucial for ending this outbreak.
While this 10th outbreak in DRC has ended, the fight against Ebola continues. On 1 June 2020, seven cases of Ebola were reported in Mbandaka city and neighbouring Bikoro Health Zone in Equateur Province and an 11th outbreak was declared. WHO is supporting the government-led response with more than 50 staff already deployed and more than 5000 vaccinations already administered.
WHO salutes the thousands of heroic responders who fought one of the world’s most dangerous viruses in one of the world’s most unstable regions. Some health workers, including WHO experts, paid the ultimate price and sacrificed their lives to the Ebola response.
The Who also Thanked the donors who provided funding to WHO for the Ebola response under the Strategic Response Plans:
African Development Bank, Bill & Melinda Gates Foundation, Canada, China, Denmark, ECHO, European Commission/DEVCO, Gavi, the Vaccine Alliance, Germany, Ireland, Italy, Luxembourg, Norway, Paul Allen Foundation, Republic of Korea, Sweden, Switzerland, Susan T Buffett Foundation, UK DFID, UN CERF, USAID/OFDA, US CDC, Wellcome Trust, World Bank, World Bank Pandemic Emergency Financing Facility.
Infrastructure Fund Africa50 helps Egypt’s Solar Power Sector take off
A 37-square-kilometer solar park so large that it can be seen from space, with over seven million photovoltaic panels, and funding of $4 billion. In Africa? Impossible? Not anymore.
Thirty international infrastructure developers got behind this project, investing in Egypt’s massive Benban solar park, which will be the largest in the world upon completion. Among the investors is Africa50, established by the African Development Bank (https://www.AfDB.org/).
Africa50 is an independent infrastructure fund, focused on high-impact projects mostly in the energy and transport sectors. The investment vehicle contributes to Africa’s growth by developing and investing in bankable projects, catalyzing public sector capital and mobilizing private sector funding.
Africa50’s investment in Egypt’s 1.5 GW solar park in the Aswan desert is a prime example.
The solar energy potential in Egypt, a country known for year-round sunny days, has long tempted investors. But the high cost of solar plants led the government to favor climate-warming fossil fuels, accounting for 90% of its power generation.
Now that the prices of its components have fallen, solar energy has become competitive, allowing Benban to become a reality. In 2017, Africa50 joined investors Norfund and Scatec Solar to reach financial close for six of the 32 utility scale solar power plants in the complex, totaling 390 MW.
The Benban project, providing clean energy to hundreds of thousands of households, will help Egypt to reach its target of generating 20% of its power from renewable sources by 2022. It has put Egypt on the map as a major solar player in Africa and has set a precedent for using North Africa’s ample solar resources to provide power while meeting climate change commitments.
The solar power project has also demonstrated Africa50’s ability to act as a bridge between the private sector and governments to deliver more projects more quickly and help narrow Africa’s infrastructure gap.
Africa50 is one of the largest contributors to the Benban park. With a 25% stake, the investment platform contributed equity to fund construction, alongside Scatec Solar and Norfund, which helped leverage total funding of around $450 million from the European Bank for Reconstruction and Development (EBRD), the Dutch Development Bank FMO, the Green Climate Fund, the Islamic Development Bank, and the Islamic Corporation for the Development of the Private Sector.
“Benban is a good example of how we use early stage project development expertise and financing to rapidly bring projects to financial close and then add equity to encourage broader financing,” said Alain Ebobissé, Africa50 CEO.
“Benban is also the first of our dozen active projects to become fully operational and is now delivering clean energy to Egyptian people and businesses,” he added.
The plants are supported by 25-year power purchase agreements with the Egyptian Electricity Transmission Company (EETC) under Egypt’s Feed-in Tariff program, backstopped by a sovereign guarantee. Access roads and interconnection facilities were funded collectively by the Benban project developers under a cost-sharing agreement with EETC and the New and Renewable Energy Agency.
The development impact of Benban is tremendous. Africa50’s six plants alone created about 1,000 construction jobs (out of 4,500 total jobs) and a quarter of the 250 permanent operations positions.
In 2019, when the plants were operational, they started producing about 870 GW hours of power annually, providing clean energy for over 400,000 households and avoiding 350,000 tons of CO₂ emissions that would have been produced from non-renewable sources.
The consortium is also pioneering the use of bifacial solar modules, capturing the sun from both sides of the panel to increase generation.
The innovations of the Benban project could provide valuable insights for the Desert to Power program, led by the African Development Bank. Desert to Power, with which Africa50 is associated, aims to develop 10 GW of solar power across the Sahel by 2025 and supply 250 million people with green electricity, including in some of the world’s poorest countries.
Moreover, Benban’s links to the infrastructure of the Aswan Dam will help combine hydro, wind, and solar power, a model for other African regions.
The landmark Benban project is an example of a fundamental change in the way an African country can provide power to its people.
For decades, the Egyptian government had built and operated most power plants and was spending more on electricity subsidies than it was on education, healthcare, and social welfare combined.
Benban proves that, with the right regulatory regime and cost structure, the private sector, supported by partners such as Africa50, can make solar power attractive, allowing governments to focus on other pressing priorities.
Indeed, in the time of COVID-19, partners such as Africa50 can play a key role in leveraging private finance to free up government budgets across the continent to deploy resources to fight the pandemic.
African Development Bank unveils strategy roadmap to safeguard food security against impacts of COVID-19
The African Development Bank (www.AfDB.org) has unveiled a strategic roadmap of projects and programmes to assist African countries in tackling the nutrition and food security aspects of the COVID-19 crisis through a raft of immediate and longer-term measures.
The Feed Africa Response to COVID-19 (FAREC) paves the way for a comprehensive intervention to build resilience, sustainability and regional self-sufficiency in Africa’s food systems and help farmers cope with coronavirus-related disruptions to the agricultural value chain.
“The Bank’s response to support the agriculture sector lays out specific measures aimed at addressing challenges faced by African countries across all aspects of the agriculture sector. Africa cannot afford a food crisis in the wake of the COVID-19 pandemic,” said Dr. Jennifer Blanke, the Bank’s Vice President for Agriculture, Human and Social Development.
A report released alongside the roadmap recommends immediate, short- and medium-term solutions for the agriculture sector including; support of food delivery for the most vulnerable; stabilization of food prices; optimization of food processing; extension support services, and provision of key agricultural inputs through smart subsidies.
According to the report, the Bank will prioritize policy support to enhance movement of inputs and food, to establish food security task forces in countries, and to strengthen the capacity of regional organisations to monitor multi-country initiatives.
The pandemic has worsened volatility in the price of food staples and complicated food system actors’ investment decision-making. The confluence of impacts risks deepening food insecurity and malnutrition. According to the World Food Programme, over 40 million West Africans face food shortages in the coming months.
FAREC forms one part of the Bank’s COVID-19 Response Facility (CRF) of up to $10 billion. The CRF is the Bank’s primary channel to deploy financial and technical measures to cushion African economies and livelihoods against the health, social and economic impacts of the pandemic.
In May, the Bank’s African Development Institute, its focal point for capacity development, hosted a seminar that examined the pandemic’s impacts on Africa’s agri-food systems and offered policy recommendations to make them more resilient and efficient.
“Ensuring food security for Africans in all situations is at the core of the Bank’s Feed Africa Strategy. Our institution will coordinate its efforts with different stakeholders across the continent to effectively answer the needs of regional member countries,” said Dr. Martin Fregene, Director of the Bank’s Agriculture and Agro-industry Department.
African Development Bank Group unveils $10 billion Response Facility to curb COVID-19
The African Development Bank Group (www.AfDB.org) on Wednesday announced the creation of the COVID-19 Response Facility to assist regional member countries in fighting the pandemic.
The Facility is the latest measure taken by the Bank to respond to the pandemic and will be the institution’s primary channel for its efforts to address the crisis. It provides up to $10 billion to governments and the private sector.
Akinwumi Adesina, President of the African Development Bank Group, said the package took into account the fiscal challenges that many African countries are facing.
“Africa is facing enormous fiscal challenges to respond to the coronavirus pandemic effectively. The African Development Bank Group is deploying its full weight of emergency response support to assist Africa at this critical time. We must protect lives. This Facility will help African countries to fast-track their efforts to contain the rapid spread of COVID-19,” Adesina said, commending the Board of Directors for its unwavering support.
The Facility entails $5.5 billion for sovereign operations in African Development Bank countries, and $3.1 billion for sovereign and regional operations for countries under the African Development Fund, the Bank Group’s concessional arm that caters to fragile countries. An additional $1.35 billion will be devoted to private sector operations.
Commenting on the Facility, Acting Senior Vice-President Swazi Tshabalala said: “The setting up of the Facility required a collective effort and courage by all our staff, Board of Directors and our shareholders.”
Two weeks ago, the Bank launched a record-breaking $3 billion Fight COVID-19 Social Bond, the world’s largest US dollar-denominated social bond ever on the international capital market. Last week, the Board of Directors also approved a $2 million grant for the World Health Organization for its efforts on the continent.
“These are extraordinary times, and we must take bold and decisive actions to save and protect millions of lives in Africa. We are in a race to save lives. No country will be left behind,” Adesina said.
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