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The proposed project has two components as follows:
(i) A. Second line of credit (LOC II); and
(ii) B. Technical assistance. The line of credit is intended to provide medium and long-term resources to the PTA Bank so that it can finance viable projects, expand and strengthen its operations and enhance its business profile.
The technical assistance is required to assist in strengthening the bank and at the same time ensure that the potential benefits of restructuring are sustained. The technical assistance consists of four principal components as follows:
(i) B1. Risk Management;
(ii) B2. Environment Impact;
(iii) B3. Corporate Governance; and
(iv) B4. Operations Enhancement.
The objective of the project is to support the economic growth and promote stronger economic integration within the member states of the PTA Bank, by facilitating mainly export-oriented investments by private enterprises, particularly SMEs.
The project will facilitate the expansion of private investment in the sub-region, thereby contributing to poverty reduction, through employment generation and increased rural productivity, by providing financial resources to support the banks lending programme and technical assistance for institutional capacity building. The project also aims to support the restructuring process of the PTA Bank, its lending capacity and enhance its sustainability, so that it can better support the development of its member countries.
1.1.1 The proposed assistance will support COMESA member countries' poverty alleviation objectives by creating economic activities capable of generating employment. By strengthening the institutional capacity of the PTA Bank, the bank's assistance will also help in consolidating the ongoing efforts by COMESA member countries in deepening their economic integration. The PTA Bank is one of the major vehicles through which these countries promote the integration of their economies. The Bank Group support to the PTA Bank will therefore help to strengthen economic cooperation among its regional member countries. The proposed project is in line with the development goals of the PTA Bank member countries, and is also consistent with the Bank Group's strategies for these countries, which stress bank assistance in promoting private sector development and employment generating investments. It is also in line with the Bank Group's policy on Regional and Economic Cooperation, which proposes the Bank Group assistance in strengthening institutions and frameworks that facilitate efficient transfer of resources for promoting regional investment and policies.
The project will contribute to the development of the private sector by providing term funding. The loan will contribute to the generation of foreign exchange, create employment and enhance intra-regional trade and integration. Finally the project will contribute to the increase of PTA Bank's lending capacity and profitability.
The women will benefit from employment created by the sub-projects. Many sub-projects financed from LOCs, especially textiles and agro-processing employ women. Hence, the proposed line of credit has a potential to benefit women in terms of employment.
The proposed project will assist the PTA Bank in promoting productive investments in the COMESA sub-region and also help to increase the commercial focus of its operations, as the proceeds of the line of credit will mainly be used to support private investments. The project will therefore contribute to the development of the private sector in the sub-region. The combination of the line of credit with technical assistance is expected to help strengthen the capacity of the bank to provide better services to the sub-region and contribute more effectively to regional integration within COMESA. The conditions attached to the project will serve to ensure that the PTA Bank operates more efficiently.
BYARUHANGA Mpanga Juliet - PIFD0