Afreximbank, CDP sign €200m facility to boost food security in Africa

Cynthia Ezekwe

In light of the persistent issue of food insecurity in Africa, the African Export-Import Bank (Afreximbank) and Cassa Depositi e Prestiti S.p.A (CDP), an Italian development finance institution, have signed a €200 million Memorandum of Understanding (MoU) to combat food insecurity and support climate-smart agriculture on the continent.

The MoU was signed by Haytham ElMaayergi, executive vice president of Afreximbank, and Dario Scannapieco, chief executive officer of CDP, and announced during the inauguration of CDP’s new office in Cairo, the first operational headquarter of the Italian institution in Africa.

Under the terms of the MoU, CDP will provide an additional €100 million, bringing the total financing from the institution to €200 million. This financing is in addition to an existing €100 million commitment that CDP had made to support food security and climate-smart agriculture in Africa. In addition to the financing, the two institutions also entered into a separate MoU aimed at facilitating business partnerships between Italian and African companies.

The new financing from CDP will be used to provide financial support to eligible African enterprises in the form of loans or guarantees. The funds will be disbursed directly to the enterprises or indirectly through local financial intermediaries. Some of the projects that will be financed with the new funds include local production and import of essential soft commodities such as cereals and fertilisers.

ElMaayergi, commenting on the partnership, stated that the financing facility would be instrumental in supporting the bank’s efforts to increase food production in its member countries and achieve food security through private sector intervention. 

He noted that the facility would also support the development of alternative food channels, such as investments in climate-smart agriculture, in order to increase food yields and build resilience among businesses in the food and agriculture sector.

ElMaayergi explained further that the MoU between Afreximbank and CDP would promote collaboration between Italian and African enterprises, and help to foster closer ties between the two regions. He stated that the ultimate goal of the MoU is to promote intra-African and extra-African trade, which would benefit both Africa and Italy.

The Afreximbank vice president noted that the collaboration between Afreximbank and CDP would include co-financing of eligible transactions with sovereigns, corporates, and financial institutions in Afreximbank’s member countries. This would provide additional financing options for these entities, helping to boost trade and investment in Africa. 

ElMaayergi also highlighted that the collaboration would involve the organisation of matchmaking events between African stakeholders and local business communities in Italy and other Afreximbank member countries.

Scannapieco said that food security and the resilience of agricultural supply chains are critical issues for the development of Africa, and that the Italian government has been prioritising these issues through initiatives such as the Mattei Plan. Scannapieco stated that the collaboration with Afreximbank would be instrumental in addressing these challenges, and that CDP was committed to supporting the economic development of Africa.

He also noted that through the collaboration with Afreximbank, CDP would be able to provide resources to local small and medium-sized enterprises (SMEs) operating in the agricultural and food sectors, which would create opportunities for Italian companies. Scannapieco added that the opening of CDP’s new office in Cairo is a testament to the importance of Africa in the institution’s strategy, and that CDP is committed to supporting the economic development of the continent.

The CDP CEO pointed out that the new facility will enable Afreximbank to provide timely and necessary support to its member countries through businesses in the food security space and bolster management of supply chain crises, particularly around soft commodities, which  will in turn contribute to the stabilisation of food security and the diversification of supply sources in Africa.