|Approval Date||17 Jul 2019|
|Sovereign / Non-Sovereign||Non Sovereign|
|DAC Sector Code||24030|
The proposed project concerns a US$ 50 million long-term Line of Credit (LoC) package to Eastern and Southern African Trade Development Bank (TDB). TDB was founded in 1985 as a multilateral, treaty-based financial institution with international immunities and privileges. It was conceived as the financing arm of the Preferential Trade Area for the Eastern and Southern African States, which was later transformed into Common Market for Eastern and Southern Africa (COMESA). TDB is a development finance institution (DFI), with whom the AfDB has an existing relationship spanning over 20 years. The facility falls under a US$ 300 million funding package to Eastern and Southern African Trade Development Bank (TDB), comprising US$ 200 million unfunded Risk Participation Agreement (RPA) and US$ 50 million Trade Finance Line of Credit (TFLoC). The LoC will have a tenor of 10 years. The project finance component will facilitate the delivery of export-oriented infrastructure, which will promote regional trade within the COMESA region. The facility further demonstrates the Bank’s longstanding and growing partnership with the TDB as a regional development finance institution in pursuit of shared development goals.
The ultimate objective of the proposed financing package is to provide support to TDB with trade and project finance funding to on lend to projects in high impact sectors including infrastructure, energy, manufacturing, agribusiness and healthcare in the Common Market for Eastern and Southern Africa (COMESA) region. The overarching objective of this facility is to provide long-tenor financing towards projects vital to the achievement of the High 5s in the Eastern and Southern African countries, including in countries in situations of fragility.
It will benefit no less than 43 financial institutions operating in over 15 regional member countries, catalysing up to $2 billion worth of trade over the three-year period. The financing will also scale up intra-African trade, and foster regional integration. The trade finance funding will boost the import-export trade activities of local corporates and SMEs, while the project finance component will support regional infrastructure development, all crucial for the attainment of the Bank’s strategic objectives under the High 5s. It is expected that approximately 33% of the facilities will be used towards facilitating trade finance transactions in countries experiencing fragility.
African Development Bank
|Last Update||21 Oct 2020|