AfDB, AFD ink €2bn co-financing deal for impact projects in Africa

Nigeria and other member-countries of the African Development Bank (AfDB) Group are to benefit from a €2 billion co-financing and partnership being the outcome of an agreement between AfDB and Agence Française de Dévelopement (AFD) to strengthen their relationship and leverage additional resources for impactful projects in Africa.

Nigeria, which has 8.9 percent equity, is the biggest continental shareholder of African Development Bank, followed by Egypt (5.4%), South Africa (5.0%), Algeria (4.2%), and Cote d’Ivoire (3.7%).

Akinwumi Adesina, president of the AfDB, and Rémy Rioux, chief executive officer of Agence Française de Développement, signed the agreement in Paris on behalf of their two institutions. The agreement, which runs for five years (2021 to 2026), targets an indicative amount (€2 billion) in co-financing over its first three years. It will complement the current partnership between both institutions through mutual understanding, by facilitating staff exchanges, sharing knowledge, and jointly organising events.

The existing partnership already covers such key sectors as infrastructure, water and sanitation, agriculture, and the private sector. The new agreement supersedes an earlier framework agreement signed in November 2015.

Aligning with the agenda of Finance in Common, a forum convened by public development banks, the African Development Bank and Agence Française de Développement will capitalize on their respective expertise and experience. They will focus on adaptation to climate change, sustainable infrastructure and urban development, governance and sound public financial management. They will also cooperate on enhancing the private and the financial sector. This will include developing joint actions to support human development and addressing fragility, especially in the Sahel region.

“This agreement that we are signing today is a special one because Agence Française de Développement is one of our most important partners. We have achieved a lot working together and I know we will continue to do good things for Africa. I am excited about the future. This is at the same time an official partnership as it is a personal one, driven by people who have the same strategic vision. My dear friend Rémy Rioux is a loyal and dear friend of Africa. It is important for the African continent to emerge economically vibrant after Covid-19, and it can do so with solid support from its development partners. The African Development Bank and the Agence Française de Développement, working together with our countries on so many levels, can make that happen,” Adesina enthused.

For Rémy Rioux, ADF’s chief executive, “Covid-19 has widened inequalities globally and disrupted the path toward achieving the Sustainable Development Goals. This is particularly true on the African continent, which has been incredibly resilient, yet has also suffered one of the worst economic recessions in history.

He said public development banks active on the continent have a key role to play in financing the post-Covid recovery in Africa, noting, “We must strengthen our partnerships, by pooling financial resources and expertise, by aligning our objectives and procedures, to be more efficient and respond to our clients’ needs.

“This is the spirit of the co-financing agreement that I am very happy to sign today with my dear friend, Akinwumi Adesina and our long-standing partner, the African Development Bank. Let’s Finance in Common,” he said.

AfDB and AFD have enjoyed a fruitful partnership with the AfDB being AFD’s fourth-largest financial partner and its largest partner among the regional multilateral banks. AFD, in turn, is the bank’s largest bilateral financial partner.