European Investment Bank supports Afreximbank with US$227mn loan

33823664091 a41cc20c22 zThe European Investment Bank (EIB) has signed a new 15 year US$227mn loan agreement with the African Export-Import Bank (Afreximbank)

The loan aims to support trade-related productive investments in Africa, including renewable energy. The facility will provide long-term funding to promoters in more than 40 countries across Africa.

By improving access to finance for private enterprises, in particular, SMEs and Mid-caps, this loan will improve trade within Africa and with the European Union, the Bank said.

It will enable smaller companies to sustain and create new jobs and will ultimately stimulate the expansion, diversification and development of African trade. At least 25 per cent of this financing will be dedicated to projects which will help to diversify the power mix in the region, reducing reliance on fossil fuels and supporting climate goals, the Bank added.

Speaking from the Africa Day event, jointly hosted by the EIB and the United Nations Industrial Development Organisation (UNIDO), Werner Hoyer, president of the European Investment Bank stated, “The EIB, as the EU Bank, is committed to supporting investment in Africa that unlocks economic opportunities, creates jobs and tackles a changing climate.”

“As one of the largest multilateral financial institutions, the EIB has a crucial role to play to help channel private capital towards the energy transition. This is urgent if we want to achieve the Paris Agreement and the Sustainable Development Goals. With this operation Afreximbank and the EIB are joining forces to improve access to clean energy across Africa,” he further added.

Benedict Okey Oramah, president of Afreximbank, commented, “We are confident that effective implementation of this facility, which heralds Afreximbank’s financing of climate action projects in Africa, will lead to strong development outcomes, including employment creation, increased economic activities, and increase in tax revenues for fiscally strained governments.”

According to Oramah, Afreximbank decided to conclude the facility in furtherance of its current strategy which prioritises intra-African trade; intra–African investments, industrialisation and export manufacturing of the labour intensive type.

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