The African Development Bank Group and the European Bank for Reconstruction and Development (EBRD) on Monday signed a memorandum of understanding to promote sustainable private sector development in Africa.
The memorandum of understanding will help catalyse new sources of financing to help bridge the $2.5 trillion annual financing gap for development in Africa. This gap requires that development finance institutions work in partnership.
Under this partnership, the African Development Bank and the EBRD will capitalize on their respective expertise and experience, with a particular focus on climate change, green and resilient infrastructure and capital markets development. They will also work on improving business environments, bolstering the real economy and mobilising private sector investment.
Covid-19 is threatening progress made towards the UN Sustainable Development Goals and is exacerbating debt vulnerability of many African countries. Sustainable private sector development will be key to recovery and prosperity across the continent.
“The new partnership agreement between our two institutions will pave the way for us to do more together, especially in supporting the growth of Africa’s private sector. The impact of Covid-19 on government resources is huge and we need to mobilise more private resources to help African countries build back stronger,” said Dr. Akinwumi A. Adesina, on signing the memorandum with his counterpart, EBRD President, Odile Renaud-Basso.
President Renaud-Basso, said: “The Covid-19 crisis has made the need for better and ever closer collective action even more urgent. Collaboration between the EBRD and the African Development Bank has grown from strength to strength over the years in the region. This partnership will allow our institutions to do even more to promote sustainable private sector development in North Africa.”
The African Development Bank and the EBRD have a long history of cooperation. Last month, the two institutions signed a $114 million financing package for the construction of the largest private solar plant in Egypt.
This new partnership will enable the two institutions to strengthen the potential for joint projects and activities, unlocking investment opportunities in their common countries of operations.
The African Development Bank Group is Africa’s premier development finance institution. It comprises three distinct entities: the African Development Bank, the African Development Fund, and the Nigeria Trust Fund. On the ground in 41 African countries, with an external office in Japan, the African Development Bank Group contributes to the economic development and social progress of its 54 regional member states.
The EBRD is a multilateral bank that promotes the development of the private sector and entrepreneurial initiative in 38 economies on three continents. The Bank is owned by 69 countries, as well as the European Union and the European Investment Bank. EBRD investments are aimed at making its investee economies competitive, inclusive, well-governed, green, resilient and integrated.