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AfDB signs Letter of Intent with Sumitomo Mitsui Banking Corporation to promote Africa’s economic development
The African Development Bank (AfDB) signed a Letter of Intent (LOI) with Sumitomo Mitsui Banking Corporation (SMBC) on Saturday, August 27, 2016, during the Sixth Tokyo International Conference on African Development (TICAD VI) in Nairobi, Kenya.
The move signals the AfDB's commitment to significantly scale up development finance as it expands its operations and services, tailoring them better to meet the demands of a sharply differentiated client base in the Bank's various regional member countries in Africa.
The signed LOI provides a broad outline for enhanced collaboration between AfDB and SMBC. It will take a variety of forms, and will evolve over time, with a focus on three broad areas; a) Increased trade finance and risk mitigation on export transactions; b) Industrial and infrastructure project financing; and c) Resource mobilisation and business development.
In May 2016, under the AfDB's Trade Finance Programme, SMBC signed a Risk Participation Agreement of USD 100 million aimed at supporting issuing banks (IBs) in Africa to expand their trade finance operations. The LOI, therefore, not only builds on an existing relationship, but, more importantly, also helps to support the delivery of the Bank's five priorities, commonly referred to as "The High 5s". These are: (1) Light up and power Africa, (2) Feed Africa, (3) Integrate Africa, (4) Industrialise Africa, and (5) Improve the quality of life for the people of Africa.
As the premier development financial institution in Africa with an ambitious mandate, the AfDB continues to reach out to value-adding strategic partnerships that are catalytic to financing the development of the continent.