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The AfDB Approved a Line of Credit of USD 30 Million to the African Banking Corporation Holdings Ltd
Tunis, 25 November 2009 - The Board of Directors of the African Development Bank (AfDB) approved a Line of Credit of USD 30 million to the African Banking Corporation Holdings Ltd (ABCH) under AfDB’s Liquidity Facility window. The proposed Line of Credit will feature a 5 year tenor and a 2-year grace period and will benefit ABCH’s banking subsidiaries in Botswana, Mozambique, Tanzania and Zimbabwe and contribute towards financing the ABCH’s pipeline projects totaling USD 96 million.
The transaction is consistent with the Bank’s Liquidity Facility approved in March 2009, which constitutes part of the Bank’s response to the economic impact of the global financial crisis. It is in line with the Regional Member Countries (RMC) efforts to mitigate the impacts of the financial crisis on their economies. It is also in line with the Private Sector strategy to support sound and well managed financial institutions.
By facilitating finance to target subprojects, AfDB will contribute to improve productivity of target enterprises, reduce reliance on imports, and facilitate the development and maintenance of local community infrastructure including roads, schools and health facilities. This transaction will also play a significant signaling role to other potential investors in ABCH and Zimbabwe thus enhances ABCH’s and other local market players’ capacity to attract additional financing from other sources.
This Line of Credit will help create more than 5,000 jobs and consolidate over 28,000 jobs at ABCH and beneficiary subprojects level. The project will also contribute to increased tax and foreign exchange revenue for governments, increased productivity and reduced import dependence in the ABCH countries of operations. It will also contribute to improve services and incomes for local communities and reduce poverty.