The MoU is expected to activate new sources of financing to close the $2.5 trillion annual financing gap for development in Africa
To boost Africa’s private-sector development and mobilize private-sector investment, the African Development Bank Group (AfDB) and the European Bank for Reconstruction and Development (EBRD) signed a memorandum of understanding (MoU) on Monday.
The MoU is expected to activate new sources of financing to close the $2.5 trillion annual financing gap for development in Africa, a gap requires development finance institutions to work in partnership.
It will also work to improve business environments, bolster the real economy.
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 mobilize more private resources to help African countries build back stronger,” said Akinwumi Adesina, president of the AfDB.
Under this partnership, the AfDB and the EBRD will capitalize on their respective expertise and experience, with a particular focus on climate change, green and resilient infrastructure, and the development of capital markets.
“The Covid-19 crisis has made the need for better and closer collective action even more urgent,” said EBRD President Odile Renaud-Basso.
“Over the years, collaboration between the EBRD and the AfDB has grown from strength to strength in the region,” she added, “This partnership will allow our institutions to do even more to promote sustainable private-sector development in North Africa.”
Progress towards the UN Sustainable Development Goals is threatened by the on-going pandemic, and has intensified the debt vulnerability of many African countries noted the EBRD, who added that sustainable private-sector development will be key to recovery and prosperity across the continent.
In April, the EBRD and AfDB signed a $114 million financing package for the construction of the largest private solar plant in Egypt during the EBRD president's first official visit to the country and the Mediterranean region.
