The African Development Bank (AfDB) and the European Bank for Reconstruction and Development (EBRD) strengthened their partnership on Monday May 17th, 2021. The aim of this new partnership is to finance the sustainable development of the private sector in Africa.
The partnership was signed on the side-lines of the summit on the African economy which is being held this Tuesday May 18th, 2021 in Paris, France. The aim of this event, which brings together 15 African leaders, is to find ways for the continent to recover from the 2.1% decline in its GDP caused by the Covid-19 pandemic. In this context, the African Development Bank (AfDB) and the European Bank for Reconstruction and Development (EBRD) will rely on the private sector to accelerate this economic recovery in Africa.
According to these two financial institutions, which are very active on the continent, the agreement signed on Monday May 17th, 2021 in Paris will help to mobilise new sources of investment in order to contribute to reducing the annual financing gap estimated at 2.5 trillion dollars needed for development in Africa. For the two banks, this gap requires development finance institutions to work in partnership.
“This new partnership agreement between our two institutions will enable us to jointly support private sector growth in Africa. The impact of the Covid-19 pandemic on governments’ resources is considerable and we need to mobilise more private finance to help African countries rebuild stronger economies,” said Akinwunmi A. Adesina, AfDB President, at the signing of the partnership with Odile Renaud-Basso, EBRD President.
Financing green infrastructure
Within the framework of the new partnership, the two financial institutions plan to pool their respective know-how and experience, focusing in particular on the fight against climate change, green and resilient infrastructure, as well as the development of capital markets. The AfDB and the EBRD will also focus on improving the business environment, strengthening the real economy and mobilising private investment. This is a strengthening of an existing partnership as the two banks are already working together on several private sector-led sustainable development projects.
A few weeks ago, the AfDB and the EBRD jointly participated in the mobilisation of $114 million for the construction of the Kom Ombo solar photovoltaic plant (200 MWp) in Egypt. This clean energy project is led by the Saudi independent power producer (IPP) Acwa Power. The two financial institutions are also co-financing the Noor Midelt I hybrid solar power plant (800 MW) in Morocco. This other project is being developed by Abu Dhabi Future Energy Company (Masdar), the Moroccan company Green of Africa, and EDF Renouvelables, a subsidiary of Électricité de France (EDF).
Jean Marie Takouleu