The European Investment Bank (EIB) and the Eastern and Southern African Trade and Development Bank (TDB) will support a new targeted financing initiative, investment in businesses across Africa that were most impacted by trade and supply chain challenges.
EIB, through its new dedicated development finance arm, EIB Global, today formally agreed to provide a trade finance facility of $200 million to TDB to this effect.
It is expected to support $400 million in new private sector investment, including by companies from across all sectors including agri-food and manufacturing which have been impacted by the disruption of trade flows following the Russia-Ukrainian crisis and COVID-19 pandemic.
The new credit line is expected to provide working capital, supply chain finance, and investment loans to microenterprises, SMEs and midcap companies across the region served by TDB, including by supporting financing through local financial intermediaries.
The largest ever cooperation between the EIB and TDB and for EIB private sector support in Africa was signed at the EU-Kenya Business Forum in Nairobi by Thomas Östros, EIB Vice President and Admassu Tadesse, TDB Group President Emeritus and Managing Director.
Thomas Östros, European Investment Bank Vice President said, “The largest ever cooperation between the EIB and TDB confirmed today will unlock $400 million of new investment by companies most impacted by trade shocks triggered by the Russo-Ukrainian conflict and ongoing disruption caused by the COVID-19 pandemic. Businesses and entrepreneurs across the region served by TDB will be able to access working capital, supply chain financing and investment loans from today.”
Admassu Tadesse, TDB Group President Emeritus and Managing Director said, “Today’s trade finance-focused credit line will be available both directly from TDB as well as through our local financial partners, and will help to address business investment challenges hampering growth and job creation. TDB plays a critical role addressing the trade finance gap and supply chain disruptions in the region, and in addition to the above, this credit line will enhance our ability to foster inter and intra-regional trade and regional integration, in line with our mandate.”
“The European Union is committed to private sector development in Africa. The new cooperation between EIB Global and TDB confirmed at the EU-Kenya Business Forum in Nairobi today will foster cross-border trade, enable agri-food companies to replace wheat imports and accelerate skilled job creation in the years ahead” said H.E. Henriette Geiger, European Union Ambassador to Kenya.
The new cooperation represents the largest business financing cooperation between the EIB, the world’s largest international public bank owned by the 27 European Union member states, and TDB, owned by 45 sovereign and institutional shareholders from Africa and beyond.
With this facility, over the last decade, the EIB has provided close to $500 million for targeted business financing managed by TDB, including through this facility.