The Board of Directors of the African Development Bank (AfDB) Group has approved a US$150mn line of credit to Afreximbank. This line of credit will be used to finance trade and trade-related projects across the participating states of Afreximbank in Africa.
p>The Board of Directors of the African Development Bank (AfDB) Group has approved a US$150mn line of credit to Afreximbank. This line of credit will be used to finance trade and trade-related projects across the participating states of Afreximbank in Africa.
Afreximbank current pipeline is highly diversified in terms of sectors. Trade financed by the bank over the past 5 years also indicates that more than 75 per cent of the approvals were to finance intra and extra-African trade, contributing to improving African economic and trade integration.
Afreximbank currently has an advanced project pipeline of over US$4.6bn.
It is anticipated that 26 per cent of the sub-projects that Afreximbank intends to finance will be in the telecommunication sector, while eight per cent and seven per cent will be earmarked for energy and transportation, respectively.
Afreximbank plays a very important role as the largest provider of trade and trade-related project finance to support countries in the region, in particular those that have recently come under stress as a result of falling commodity prices, slower export demand, or lower remittances.
For its part, AfDB has also supported these countries by setting up a US$1.5bn Emergency Liquidity Facility to provide fast and exceptional support to institutions experiencing liquidity problems and a US$1bn Trade Finance Initiative to fulfil a counter-cyclical role providing finance to promote trade where other players have retreated.
The project will sustain jobs directly as well as indirectly through forward and backward linkages along the supply chain. Therefore, this transaction will directly support the development programs of Afreximbank’s participating states, help build their economies and reduce poverty, including in fragile states; as well as contribute to regional integration.
