European Investment Bank supports Africa’s private sector affected by COVID
Private sector investments across Africa, critical to coping with the impact of COVID and unlocking sustainable growth, will be accelerated by new financings totaling EUR 62m confirmed by EIB Global, the new specialized arm of the European Investment Bank earlier today. These announcements precede the first physical Africa-Europe summit since the start of the COVID-19 pandemic.
The six new partnerships will support targeted private sector investments, including high-tech innovation, rural microfinance and business finance from Cameroon to Malawi.
Werner Hoyer, President of the European Investment Bank, the world’s largest international public bank, stressed the crucial need to intensify cooperation, within the framework of Team Europe, between African financial institutions and international partners to guarantee that the African private sector can be the engine of economic and social growth. Speaking ahead of his participation in the EU-AU summit in Brussels, he said:
“It is essential for Africa, Europe and the world to ensure that African startups, entrepreneurs, smallholders and businesses can exploit new opportunities, create jobs and grow. Over the past six decades, the EIB has worked with financial partners across the continent to support Africa’s private sector. Today, as EIB Global, we are unveiling an innovative, high-impact cooperation that will support businesses across the continent, build economic resilience against the impact of COVID-19, and build a better future. The EU-Africa Business Forum is ensuring that the impact of increased sustainable private sector investment across Africa is recognized ahead of the EU-African Union summit.
Speaking at the EU-Africa Business Forum, Thomas Östros, Vice-President of the European Investment Bank (EIB): “I am very proud to announce 6 new agreements in the private sector. These agreements are the result of this new spirit of cooperation from Team Europe to make every penny of development count. As an EU bank, we are committed to supporting entrepreneurs and businesses of all sizes across the African continent” He added, “Partnership is at the heart of our work and more since we launched EIB Global, our new specialist arm dedicated to increasing the impact of international partnerships and development finance. Our investments aim to benefit all sections of society: big cities, small villages, vulnerable regions, entrepreneurs and of course women and girls. »
Accelerating investments in African tech startups
EIB Global is supporting two of Africa’s leading technology investors, Atlantica Ventures and Janngo, through the Boost Africa initiative. This is a joint initiative with the African Development Bank (AfDB), with the financial support of the European Commission and the Secretariat of the Organization of African, Caribbean and Pacific States (OACPS) in the framework of the 11th European Development Fund (EDF).
The €12.5m funding for Atlantica will support €50m of new investments in innovative tech start-ups across the continent and expand specialist venture capital funding for promising entrepreneurs.
The EIB’s new EUR 10 million commitment to Janngo will increase investment in technology and technology-enabled start-ups to improve access to healthcare, education and financial services in across Africa and enable African tech companies to create jobs for youth and women.
Ensuring access to finance in remote and fragile communities
Thousands of African entrepreneurs will benefit from local currency microfinance in rural areas where access to financial services remains limited thanks to a new EIB cooperation with the Grameen Crédit Agricole Foundation and the European Solidarity Finance Fund for Africa (FEFISOL).
The latest EUR 10 million partnership between the EIB and the Grameen Crédit Agricole Foundation will accelerate social inclusion and strengthen economic resilience in the face of the pandemic, and is expected to support more than 36,000 jobs and enable the granting of 98,000 new loans to women entrepreneurs in disadvantaged communities across Africa.
The new €5 million funding for FEFISOL will enable smallholder farmers currently excluded from traditional financing to access microfinance through small rural microfinance institutions and fair trade certified agricultural cooperatives in 25 African countries.
The new European Solidarity Finance Fund for Africa, FEFISOL 2, builds on the successful support to rural microfinance provided through the EIB-backed FEFISOL I over the past decade.
Support private sector financing with major African local banks
Smallholders in Malawi will benefit from EUR 12.5 million of EIB support for long-term agricultural finance in cooperation with First Capital Bank and the European Union.
The new scheme, also supported by an EU grant, is the latest in a regional agricultural finance initiative. It will enable farmers in Malawi to upgrade their equipment and withstand the challenges of climate change.
A €12 million COVID Resilience Business Finance Initiative, also announced today, with the Commercial Bank of Cameroon will support manufacturing, services, agricultural and trading businesses in Central African countries affected by the pandemic by providing long-term financing essential for business expansion.