AfDB Group Supports Energy and Finance Management Projects in Egypt and Angola
The Boards of Directors of the African Development Bank (AfDB) Group approved today in Tunis, loans amounting US$ 334.27 million to finance energy and financial management support projects in Egypt and Angola. The Bank approved US$325 million for Egypt and US$ 9.27 million for Angola.
Egypt - The project aims at increasing the generation capacity of the Unified Power System (UPS) by about 4% in the year 2012, to meet the electricity demand on the system in the short-to-medium term. When completed, it will contribute toward making sufficient and reliable power available to various consumers including households, agriculture, business and industries. The project will enhance the overall goal of sustaining economic growth by providing adequate energy at minimum cost to the various economic sectors thereby improving the standard of living of the population.
The project is estimated to cost US$ 1,322.73 million. The AfDB loan will cover 24.5% of the total cost. Other financiers are the Islamic Development Bank (IDB), the Arab Fund (AFESD), the Kuwait Fund (KFAED), and the Egyptian Electricity Holding Company (EEHC).
In November 2006 the Bank supported comprehensive structural and financial reforms initiated by the government of Egypt with a loan of US$ 500 million, the highest amount ever approved by the institution for any of its regional member countries.
The ADB Group began operations in Egypt in 1974. To date, its commitments in the country stand at US$ 2.5 billion in 49 operations.
Angola - For its part, Angola will receive a loan of US$ 9.27 million from the African Development Fund (ADF), the concessional window of the Bank Group, for its Financial Management Support Project (PAGEF), which seeks to strengthen institutional capacities in the areas of state property management, and internal and external audit systems, with a view to ensuring transparent and efficient public finance management in order to promote more equitable economic growth.
PAGEF falls within the strategic context of the Government’s General Program and its interim Poverty Reduction Strategy Paper (PRSP-I), which aims in particular, for "the creation of a favorable macroeconomic framework for growth and poverty reduction" and "institutional capacity building and improvement of governance". By promoting transparency and strengthening the integrity of the budget system, through greater accuracy of budgets and General State Accounts (GSA) as well as effective external audits by the Court of Auditors, the PAGEF will contribute to the enhancement of financial governance, necessary for macroeconomic stability and improvement in the business environment for private sector activities.
It is in line with the Bank’s intervention strategy in Angola, as defined in the Results-based Country Strategy Paper (RBCSP 2005-2007), especially the thrust on creating an enabling environment for private sector development.
The cost of the project is estimated at UA 6.57 million. The loan will cover 89.7% of the costs. The Angolan government will provide the remaining UA 0.68 million or 10.3% of the total cost of the project.
The Bank Group’s operations in Angola started in 1983. To date, the Group has committed a total of UA 298.07 million, about US$ 469.3 million in 32 operations in the country.