The European Investment Bank (EIB) and the African Export-Import Bank (Afreximbank) are directing US$356.48mn of financing to support the resilience and recovery of African nations in response to the COVID-19 pandemic
The funds will ensure businesses across the continent have the working capital to sustain jobs and maintain vital imports. It also earmarks at least a quarter of the capital for climate change mitigation and adaptation, helping Africa maximise the opportunities of a green recovery.
The support package is the first accelerated COVID-19 response for the entire sub-Saharan region under the EIB’s Team Europe initiative—a US$7.96bn package to help the most vulnerable and exposed countries respond to the immediate health crisis, mitigate social and economic impacts, and build resilience for the future.
The support for sub-Saharan Africa delivered with Afreximbank is structured in two parts. The package redeploys US$237.65mn of funds previously allocated to trade-related investments, directing them specifically to sectors most impacted by the pandemic. Recognising the pressing need for support, Afreximbank and the EIB are also injecting a further US$118.83mn to the package.
The COVID-19 pandemic is inflicting an unprecedented negative impact on African economies, just as it has on nations around the globe. Manufacturing has been impacted by disruptions in global supply chains. Meanwhile, migrant remittances to some of the poorest economies in the world have dwindled, exposing the most vulnerable in those markets to exacerbated difficulties.
A portion of the Afreximbank and EIB support package will be targeted at enabling cross-border trade in medical supplies and equipment essential for slowing the spread of COVID-19. In addition, the support package will provide financing to long-term investments in trade expansion, helping both the availability of goods and growth in economic prosperity. The package will support participating Member States of Afreximbank, 46 of which a part of the Contonou Agreement in sub-Saharan Africa.
Women in business and green revolution major focus
A portion of the package will target businesses owned or managed by women. In addition, at least 25 per cent of the funds allocated under the partnership will be earmarked for green projects, such as renewable power, energy efficiency and climate change adaptation measures. Afreximbank is appraising renewable energy projects in excess of circa US$118.83mn for which the EBI facility will support. In addition, part of the funds will support the re-purposing of factories to manufacture PPE and other COVID-19 materials, through the African Medical Supplies Platform, a digital platform promoted by Africa CDC, Afreximbank, UNECA and Au Envoy.
