The Japan International Cooperation Agency (JICA) and the African Development Bank (AfDB) have signed a JPY34.41 billion (about $ 300 million) loan agreement to support the private sector across Africa.

The funding is a component of Japan’s Official Development Assistance (ODA) to Africa according to the statement.

The "Seventh Private Sector Assistance Loan” carries an interest rate of 0.35%, and is to be repaid in 40 years after a 10-year grace period.

The loan is intended to promote economic growth and reduce poverty in Africa by supporting the private sector through the AfDB’s non-sovereign window.

The signing ceremony was held at AfDB headquarters in Abidjan, Côte d’Ivoire in the presence of Japan’s Ambassador to Cote d’Ivoire, Hiroshi Kawamura, JICA Director General for Africa, Ryuichi Kato, and JICA’s Chief Representative in Cote d’Ivoire Tsutomu Iimura.

Speaking at the signing ceremony, Hassatou N’Sele, Acting Finance Vice President AfDB,   hailed JICA’s   continued support to the African continent.

The loan agreement marks the conclusion of the 2nd phase of the Private Sector Assistance (EPSA) Initiative and the beginning of the 3rd phase, which was announced at the 6th Tokyo International Conference on African Development (TICAD) held in Nairobi, Kenya in August 2016.

The 3rd phase has a target of over $3 billion for the next three years.

N’sele emphasised the importance of the EPSA loans that have reached a cumulative $1.5 billion since 2007.

"JICA is a very strategic partner of the AfDB and a major contributor to development in Africa,”  she  is quoted as saying the statement. She added that  the  support in promoting private sector growth, quality infrastructure and alleviating poverty has helped the Bank  grow its private sector portfolio more than ten-fold since the inception of the EPSA Initiative just over a decade ago.

In line with the Bank’s High 5 priorities, all of which involve the private sector, the Loan will contribute towards further growth of the Bank’s non-sovereign operations,” she said.

The JICA Director General, Kato, observed that JICA’s priorities for Africa are fully aligned with the High 5s and affirmed JICA’s intention to achieve the S$ 3 billion joint target for the 3rd phase of EPSA over the next three years.

"The $100 million first Private Sector Assistance Loan from JICA to the AfDB was signed in 2007. This seventh loan brings the grand total to US$ 1.5 billion. The Private Sector Assistance Loans are one of the three components comprising the EPSA Initiative, the other two being the Accelerated Co-financing Facility (ACFA) for public sector co-financing with JICA $1.5 billion since 2007, and the Fund for African Private Sector Assistance (FAPA), a multi-donor thematic trust fund administered by the Bank.”