Enhanced Private Sector Assistance for Africa: EPSA Initiative

Introduction

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 provided generous financial support to its launch in 2005.

According to the original EPSA announcement and pledge by the Japanese Government at the Gleneagles Summit, the Japan International Cooperation Agency (JICA, formerly JBIC) will provide a total of USD 1 billion over five years in concessional loans through a combination of direct lending to the Bank under the EPSA Non-sovereign Loan component and cofinancing under the Accelerated Cofinancing Facility for Africa (ACFA). In addition, the GOJ would contribute grant resources to the Fund for African Private Sector Assistance (FAPA), beginning with an initial contribution of USD 20 million. These three EPSA components and their present status of implementation are summarized below.

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. The first loan was signed on 20 February 2007 in the amount of JPY 11.5 billion (equivalent to USD 100 million). Disbursement of the first loan was completed during 2008 and the loan was closed in September.

At the Tokyo International Conference on African Development (TICAD) in May 2008, Japan pledged the "Second Private Sector Assistance Loan Under the Joint Initiative Titled EPSA for Africa" in an amount of JPY 32.1 billion (equivalent to USD 300 million), again on highly concessional terms. The bilateral Exchange of Notes and Loan Agreement were signed at the Bank on 11 September 2008, and a first disbursement of JPY 30 billion was drawn immediately thereafter.

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 shall attribute the utilization of NSL proceeds to specific operations. Thus far, the following projects have been endorsed for coverage under the NSL component of EPSA:

  • Regional Infrastructure – East Africa Submarine Cable System, RASCOM (first Pan-African communications satellite), Toll road in Nigeria
  • Financial Sector – Credit Lines for SMEs through the West African Development Bank (BOAD) and two Nigerian commercial banks; equity investment in the  creation of the TCX currency hedge facility.
  • Clean Energy – Small-Scale Hydro in Madagascar, Large Hydro in Uganda
  • Microfinance – Launch of a new MFI in Tanzania and two in Zambia
  • Equity Fund- Fund to invest Maghreb region.

Accelerated Cofinancing Facility for Africa (ACFA)

The Accelerated Cofinancing Facility for Africa (ACFA) provides joint project financing with JICA on concessional terms. AfDB provides project appraisal and loan administration services for the whole project.

The following nine projects have been approved for ACFA cofinancing by JICA (as of 31 March 2010):

Approved ACFA Projects

Project

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)

5.89

66.06

2. Montepuez – Lichinga Road Project (Mozambique)

19.71

30.10

3. Arusha – Namanga – Athi River Road Development Project (Tanzania, Kenya; JICA loan only for Tanzania)

39.712

53.279

4. Bujagali Interconnection Project (Uganda)

19.21

19.21

5. Power Supply, Transmission and Distribution Project in Santiago Island (Cape Verde)

25.07

4.82

6. Transport Facilitation Program for the Bamenda-Enugu Corridor (Cameroon, Nigeria: JICA loan only for Cameroon)

44.99

204.88

7. Nacala Corridor Phase I (Mozambique, Malawi: JICA loan only for Mozambique)

40.89

117.04

8. Road Sector Support Project (Tanzania)

49.04

152.00

9. Nile Equatorial Lakes Countries Interconnection line (Uganda, Burundi,  Rwanda, DRC, Kenya: JICA loan only for Uganda)

37.48

160.2

Total

281.99

807.5

The UA 282 million cofinanced by JICA to date translates to about USD 388 million. Added to the USD 400 million non-sovereign loans (above), total JICA commitment thus far is USD 788 million, more than three quarters of the original $1 billion pledge to be achieved during 2006 through 2010. Additional projects are in the pipeline under the ACFA and NSL components of EPSA to ensure achievement of the $1 billion target by end 2010.

Fund for African Private Sector Assistance (FAPA)

The Fund for African Private Sector Assistance (FAPA) provides grant funding for technical assistance and capacity building for the Bank’s public and private sector clients. The Board approved the Fund for African Private Sector Assistance (FAPA) on 12 October 2005 and the related documentation was executed on 24 January 2006.

Japan originally committed and disbursed $20 million to launch FAPA, initially as a bilateral fund, and has indicated interest in continued support to FAPA as a multi-donor fund. The Board of Governors provided a resounding endorsement of FAPA by allocating UA 5 million to the Fund from the net income of the Bank in 2008, followed by allocation of UA 2 million from 2009 net income. At the Bank's Annual Meeting held in Dakar in May 2009, The Government of Japan announced a further contribution of USD 10 million, bringing total available resources to approximately $40 million. The following 32 grants have been approved to date, bringing total FAPA commitments to over $27 million:

FAPA Grant Approvals (as of 01 November 2009)

Location

Project

Amount

Short Objective/Description

Regional

Franchising

$975,000

To stimulate SME growth and job creation through the advancement of franchising in Africa.

Regional

Gambia River Basin Development

$800,000

To finance the services of an Advisory Mission to propose to the Authorities of the Gambia River Basin Development Organization (OMVG) a public-private partnership (PPP) option to optimize the implementation of three power projects. Co-financed with NEPAD IPPF.

Regional

East Africa Submarine Cable System (EASSy)

$275,000

To structure the Special Purpose Vehicle (SPV) of the EASSy project for development of an optical fiber submarine cable network for the eastern seaboard. Co-financed with NEPAD IPPF.

Cameroon

Growth-Oriented Women Entrepreneurs (GOWE)

$530,000

To provide integrated support for development of women-owned enterprises in Cameroon.

Regional

East African Development Bank

$1,000,000

To strengthen EADB’s capacity to contribute to regional integration of EAC Member states and promote more effectively the development of the private sector, particularly SMEs.

Regional

Shelter Afrique

$950,000

To improve access to housing, develop medium-sized housing development companies, promote economic and social development and create employment in beneficiary countries.

DR Congo

Advans Congo

$940,000

To build the capacity of Advans Congo Bank, a newly established micro-finance institution specializing in providing commercial retail banking services to the urban-based MSME market of the Democratic Republic of Congo

Regional

West African Development Bank (BOAD)

$953,000

To prepare the Accounting Procedures Manual and assist with software selection, acquisition, implementation, migration and staff training.

Ghana

Export-oriented SMEs

$1,000,000

To provide Technical Assistance to Ghanaian Small and Medium Enterprises (SME) with high potential to export Non-Traditional products.  FAPA resources will be used to provide TA and training specifically intended to close the identified gaps and mitigate institutional weaknesses of SMEs.

Senegal-Mauritania

Rosso Bridge

$1,000,000

To finance the feasibility study for a bridge over the Senegal River between Mauritania and Senegal to facilitate regional integration and international trade. Co-financed with NEPAD IPPF.

Regional

PTA Bank

$1,000,000

To implement the new risk management framework and further enhance the PTA Bank’s capacity and growth.

Liberia

Access (Microfinance) Bank

$1,000,000

To build the capacity of Liberia Access Bank, a newly established micro-finance institution specializing in providing financial services to micro and small enterprises in Liberia.

Tanzania

CRDB

$975,300

Capacity building of CRDB Bank and SME clientele to enhance implementation of joint AfDB-USAID SME Guarantee Facility

Tunisia

Strengthening Accounting

$332,650

To prepare a national strategy for upgrading the chartered accountant profession in Tunisia.

Rwanda

Private Sector Capacity Building

$1,000,000

To enhance RPSF execution capacity and governance and support execution of a number of core mandate activities including business information (resource center, magazine, radio programs), MSME competitiveness (BDS centers, mini-exhibitions), special entrepreneurship programs for women and youth, and public-private sector dialogue.

Regional

Africa Business Roundtable

$500,000

To assist the ABR, as a second tier ('association of associations') private sector representative organization for Africa, to perform a number of core functions that will contribute to strengthening the private sector in Africa.

Zambia

Zanaco

$980,824

Strengthening of Business Development Services (BDS) providers and SME associations, in collaboration with International Labor Organization (ILO) and International Trade Center (ITC).

Regional

Central Africa IT Backbone

$501,760

Finalize the pre-investment studies and prepare the project for implementation (technical and environmental studies, harmonization of national and regional ICT legislation); establish a PPP operation for the implementation, operation and maintenance of the CAB project. Cofinanced with NEPAD IPPF.

Madagascar

Extractive Industries Transparency Initiative

$625,000

To support implementation of the Extractive Industries Transparency Initiative (EITI) for improved governance in Madagascar’s extractive industry.

Egypt

Franchising Sector Support Program

$950,000

To provide technical assistance to the Egyptian Social Fund for Development (SFD) and to various stakeholders in the Franchising Program.

Regional

ATMS/AMSCO

$1,000,000

To enhance management training and capacity building for African MSMEs through provision of experienced managers on a commercial basis.

Zambia

PFSL

$935,000

To enhance capacity of a greenfield microfinance bank offering diversified financial services to MSMEs.

Nigeria

AB Nigeria Microfinance Bank

$1,000,000

To establish a Greenfield MFI in Nigeria based on the Access/LFS business model.

Tunisia

Zaarat Desalinization Study

$963,000

To perform a feasibility study and create a concession agreement for a seawater desalination plant for the Gafsa/Gabes region.

Congo

Banque Congolaise de l'Habitat

$178,579

To provide training to enhance the quality and range of products offered to develop formal housing markets in Congo

Tanzania

Access Microfinance Bank

$642,237

To provide management and software training/implementation for an established MFI in Tanzania.

Regional

ATI (African Trade Insurance)

$1,000,000

To assist the African Trade Insurance Agency, a multilateral organization, to strengthen its corporate governance, implement an appropriate underwriting system, strengthen the information communication system and attract private equity.

Mauritania

SNIM (Société Nationale des Industries Minières

$989,000

To assist SNIM in strengthening its institutional capacity in the implementation of its environmental Management system and its Strategic Environmental and Social Management Plan.

Regional

African Carbon Support Program

$910,000

To create a carbon trading and CDM preparation team of experts within the Bank's private sector project origination for the benefit of the Bank's clients to take advantage of carbon trading

Regional

Central African development Bank

 

$ 1,000,000

To make BDEAC a reliable partner in strengthening the regional financial market, promoting long-term financing of infrastructure projects, and advancing regional integration objectives

Egypt

Egypt Entrepreneurship & Agribusiness Support

 

$ 1,000,000

To enhance value chain development for two select commodities (horticulture and dairy); increase capacity of participating financial institutions (PFIs) to provide long-term credit for agribusiness investments in a sustainable manner; and develop policy briefs with a view to influencing the development of a coherent national private sector-led agribusiness development policy

Regional

African domestic Bond Fund

$ 1,000,000

To create a bond fund that will invest in local currency denominated sovereign bonds, including sovereign guaranteed bonds of state owned enterprises in African countries.

TOTAL

 

$ 26,890,988

 

Please select a country

Explore what we do

Select a country

Explore our
activities