Enhanced Private Sector Assistance for Africa

The Enhanced Private Sector Assistance (EPSA) Initiative is an innovative, multi-component, multi-donor framework for resource mobilization and development partnership to support implementation of the AfDB’s Strategy for Private Sector Development.

Drawing on successful development experience in Asia and around the globe, EPSA was conceived in partnership with the Government of Japan (GOJ), which has provided generous financial support to its implementation since 2005.

Components of EPSA

EPSA consists of (1) Accelerated Co-financing Facility for Africa (ACFA), (2) Non-sovereign Loan (NSL), and (3) Fund for African Private Sector Assistance (FAPA), as shown in the picture below.

• (1) ACFA: is a sovereign co-financing arrangement between AfDB and the Japan International Cooperation Agency (JICA), where JICA lends on preferential terms to borrowers under this scheme
• (2) NSL: is a line of credit from JICA to the Bank on concessional terms for financing the Bank’s private sector operations
• (3) FAPA: is a Trust Fund for technical assistance and capacity building for the Bank’s public and private sector clients

EPSA Targets and Achievements

• EPSA Phase 1: EPSA 1st phase was USD 1 billion in 5 years (2006 -20011), which was announced at the July 2005 Gleneagles G8 Summit, which was fully achieved in 2011.
• EPSA Phase 2: EPSA 2nd phase was USD 2 billion in 5 years (2012 – 2017), which was initially announced as 1 billion USD at the May 2012 Camp David G8 Summit (AfDB Press Release) and was doubled to 2 billion USD in the occasion of  September 2014 AU Summit in Ethiopia, where Japanese Prime Minister ABE made a speech. The EPSA2 target is nearly fully achieved.
• EPSA Phase 3: EPSA 3rd phase will start as soon as the 2nd phase is fully achieved. It was announced at Aug 2016 TICAD6 (AfDB Press Release) that both AfDB and JICA will jointly target USD 3 billion in 3 years.

The EPSA Loan for Non-Sovereign Operations (NSL)

  The Non-Sovereign Loan component helps finance the Bank’s private sector operations through a line of credit from JICA to the Bank on concessional terms. So far, there has been 6 NSLs, totaling 1.2 billion USD equivalent.

• 1^st NSL: JPY 11.5 billion (equivalent to USD 100 million) was signed on 20 February 2007, soon after the inauguration of President Donald Kaberuka. Press Release1 / Press Release2
• 2^nd NSL: JPY 32.1 billion (equivalent to USD 300 million) was signed on 11 September 2008, which was pledged by GOJ at the Fourth Tokyo International Conference on African Development (TICAD IV) in May 2008. Press Release
• 3^rd NSL: JPY 8.44 billion (equivalent to USD 100 million) was signed on 17 October 2011. Press Release
• 4^th NSL: JPY 9.48 billion (equivalent to USD 100 million) was signed on 16 December 2013. Press Release
• 5^th NSL: JPY 30.69 billion (equivalent to USD 300 million) was signed on 16 September 2014 (following the Exchange of Notes with GOJ signed on 12 September 2014 at Abidjan), which had been pledged by GOJ at the TICAD V Ministerial preparation meeting in Cameroon in May 2014. Press Release
• 6^th NSL: JPY 35.88 billion (equivalent to USD 300 million) was signed on 8 September 2015, soon after the inauguration of President Akinwumi Adesina. Press Release

  In principle, although the resources are pooled with the other financial resources of the Bank and subject to normal Bank processes (including eligibility and pricing), the Bank attributes the utilization of NSL proceeds to specific operations. Thus far, the following projects have been endorsed under the NSLs, a component of EPSA (as of February 2017):

Infrastructure –  Bujagali Hydropower Plant (Uganda), Sahanivotry Hydropower Plant (Madagascar), RASCOM (first Pan-African communications satellite), East Africa Submarine Cable System (EASSy), Lekki Toll road (Nigeria), Takoradi II Gas Fired Power Plant (Ghana), XINA Solar One Project (South Africa), Kigali Bulk Water Supply Project (Rwanda), etc.

Financial Sector  –  Credit Lines to regional Development Financial Institutions (DFIs) such as the West African Development Bank (BOAD), Africa Trade Insurance Agency (ATI), Africa Finance Corporation (AFC), East Africa Development Bank (EADB), Eastern and Southern African Trade and Development Bank (PTA Bank) and PTA Reinsurance Company (Zep-Re), and African Export-Import Bank (Afreximbank), as well as several other commercial banks and National DFIs (Nigeria); equity investment in the creation of the TCX currency hedge facility.

Microfinance –  Launch of a new MFI in Tanzania (Access Bank Tanzania) and two in Zambia (Investrust and Zanaco), as well as USD 125 million package SME assistance program expected to benefit 25 MFIs (Africa SME Program)

Equity Fund –  Sector specific Funds (e.g. Africa Health Fund (AHF), Africa Agriculture Fund (AAF), Agri-vie, Alitheia Indentity Fund – in support of Women Entrepreneurs), as well as Region specific Funds  (e.g Maghreb Private Equity Fund (MPEF II), West Africa Emerging Market Fund (WAEMF), Atlantic Coast Regional Fund (ACRF II) ), as well as PPP Infrastructure Project Development Fund (e.g. Kukuza PDC), etc.

Industries, etc –  Lake Harvest (Aquaculture project in Zimbabawe, which received one of the highest ex-ante ADOA ratings), OLAM (major agriculture company investing in Africa), and Mouline Moderne du Mali (Agriculture company in Mali), etc

Accelerated Co-financing Facility for Africa (ACFA)

The Accelerated Co-financing Facility for Africa (ACFA) provides joint or parallel project financing with JICA on concessional terms. (See JICA’s website for its interest rates – special for EPSA under "Preferential Terms":)

AfDB provides project appraisal and loan administration services for the whole project.

The following 22 projects have been approved for ACFA co-financing by JICA (as of Feb 2017):

Approved ACFA Projects

Project	Approval Date (JICA Loan Agreement Date)	JICA (million UA)	ADB (million UA)
1. Road Improvement and Transport Facilitation Program on the Southbound Bamako-Dakar Corridor (Senegal, Mali; JICA loan only for Senegal)	31-Mar-06	5.89	66.06
2. Montepuez – Lichinga Road Project(Mozambique)	9-Mar-07	19.71	30.10
3. Arusha – Namanga – Athi River Road Development Project (Tanzania, Kenya; JICA loan only for Tanzania)	19-Mar-07	39.712	53.279
4. Bujagali Interconnection Project (Uganda)	30-Oct-07	19.21	19.21
5. Power Supply, Transmission and Distribution Project in Santiago Island (Cape Verde)	25-Mar-08	25.07	4.82
6. Transport Facilitation Program for the Bamenda-Enugu Corridor (Cameroon, Nigeria: JICA loan only for Cameroon)	31-Mar-09	44.99	204.88
7. Nacala Corridor Phase I (Mozambique, Malawi: JICA loan only for Mozambique)	10-Mar-10	40.89	117.04
8. Road Sector Support Project (Tanzania)	26-Mar-10	49.04	152.00
9. Nile Equatorial Lakes Countries Interconnection line (Uganda, Burundi, Rwanda, DRC, Kenya: JICA loan only for Uganda)	31-May-10	37.48	160.2
10. Iringa-Shinyanga Backbone Transmission Investment Project (Tanzania)	13-Dec-10	42.72	45.36
11. The project to Strengthen and Extend the Electricity Transmission and Distribution Networks (Cameroon)	4-Mar-11	20.91	31.64
12. Electricity Transmission and Distribution Network Development Project (Cape Verde)	30-Mar-12	47.24	8.42
13. and 14. Kazungula Bridge Project(Botswana, Zambia)	12-Oct-12	93.25	51.00
15. Road Sector Support Project II(Tanzania)	8-Apr-13	62.14	140.00
16. Nacala Corridor Phase III (Mozambique, Parallel)	29-Nov-13	49.34	38.83
17. Batchenga Lena Road Development Project (Cameroon)	7-Apr-15	35.28	114.45
18. Power Sector Reform Support Program (PSRSP) (Angola, Parallel)	17-Aug-15	168.75	649.35
19. Kenya-Tanzania Power Interconnection Project (Tanzania)	15-Jan-16	63.48	102.79
20.  Green Morocco Plan Support Program(Morocco)	4-Mar-16	4.96	94.96
21. Rusumo-Kayonza Road Improvement Project (Rwanda)	13-Jul-16	40.00	173.50
22. Construction of a New Bridge across the Volta River on the Eastern Corridor Project(Ghana)	4-Mar-16	73.97	-
Total		984.03	2,257.89

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