The mission of the Private Sector Department is to ensure the Bank Group’s participation in private sector development of Regional Member Countries (RMCs), by means of lending, equity participation, guarantee and technical assistance related to the financing of private sector projects and programs, including small and medium-size enterprises and privatization. The Department plans, organizes and carries out the activities related to private sector project identification, preparation, appraisal, implementation and portfolio management. It also conducts studies on the investment climate of RMCs as well as other private sector related issues, with a view to identifying investment opportunities and contributing to the creation of an enabling environment for private sector development.
The Private Sector Operations Department coordinates its activities with the Bank’s different departments through its front office and its four divisions organized as follows:
The Private Sector Front Office
AfDB Private Sector Front Office can better align its staff around a strategic planning process for the Private Sector development in the Regional Member Countries by:
- Clarifying goals and defining strategy to achieve these goals;
- Proactively developing and improving products and services to promote entrepreneurship and private sector participation in key economic sectors;
- Actively pursue and develop partnerships with multilateral and bilateral development finance institutions, regional development banks and private sector financial institutions with regard to project development and co-financing, underwriting and loan syndication;
- Initiating marketing strategies and coordinating actions to influence the market.
The Infrastructure Finance Division
The primary role of the Infrastructure finance Division is to implement the private sector strategy in mobilizing investments and advisory services for infrastructure development and public-private partnerships (PPPs) on the continent, on a regional basis, and within individual Regional Member Countries. The division provides support directly to corporate entities and projects, as well as through specialized intermediaries such as private equity and venture capital funds.
The principal lending and investment activities of the Division entail the identification, preparation of and appraisal of programs and projects that provide debt, equity, credit enhancement (including guarantees) or a combination, in order to:
- Provide financial support to promote private sector infrastructure development and PPPs on a regional, national or sub-national basis in RMCs including health and education sectors;
- Support the development of indigenous entrepreneurship by promoting the participation of local entrepreneurs in infrastructure projects supported by the Bank;
- Promote the development of competitive private enterprises, through the development of efficient and affordable infrastructure services;
- Support private sector involvement in programs aiming at improving the quality of life of communities within RMCs by accelerating delivery and access to improved and affordable infrastructure services, including water and sanitation, power, telecommunications, transportation, health and education.
The Division’s non-lending activities as advisor and partner include:
- Technical assistance for the development and preparation of projects identified as a priority at regional, national and local level, though NEPAD and/or by individual RMCs;
- Technical assistance and capacity building support to promote international and local private sector participation in infrastructure projects;
- Collaborating with Country and Regional Departments to identify areas of policy dialogue and interventions to support Governments of RMCs to facilitate PPPs;
- Fostering and building strong development partnerships with multilateral, regional and national development banks, private sector financial institutions and other key players to support infrastructure development and PPPs on the continent.
The AfDB’s Infrastructure Finance Division is a team of investment professionals with sound experience in finance, engineering, consulting, PPP background, with a cumulative experience of 100 years in infrastructure investment
The Industries and Services Division
The main objective of this division is to ensure the Bank’s Group’s support to private sector development in Regional Member Countries through private equity and direct/indirect lending to private sector enterprises mainly in the sector of petrochemicals, mining, oil and gas, manufacturing, agribusiness, hospitality, health and education.
The Division’s role in Africa includes:
- Support economic growth by helping RMCs diversify their economies, process their raw materials and add value to their natural resources.
- Increase local participation by involving provinces, local communities, local SMEs in the project life cycle (from preliminary to post project phase)
- Apply high standards on environmental and social impacts.
- Help implement high standards on good governance such as EITI and revenues management;
- Provide utilities (water, electricity, connectivity…), health and education to local communities
The Division’s role within the Bank includes:
- Provide solutions to ADB portfolio concentration and weak franchise concerns;
- Offer opportunities to ADF countries to access ADB resources as part of the Bank’s strategy for fragile and post conflict countries.
- Promote investments diversification in various sub sectors.
Frequently used instruments/products:
- Long-term loans in foreign currencies and occasionally in local currencies
- Guarantees in foreign and local currencies
- Participation (equity and quasi equity investments)
The AfDB’s Industries and Services Division is a team of investment officers with extensive experience in finance, mining, agriculture, natural resources, health and education, with a cumulative experience of 100-plus years of financing industries and services.
The Operations Support Division
The mandate of the Operations Support Division is to promote the development of efficient financial sectors in the Bank’s Regional Member Countries. Towards this objective, the division works with the origination and Portfolio Management divisions to support private sector transactions.
The AfDB Operations Support Division is a team of finance specialists, economists and investment officers with a sound experience in transactions financial and complex projects structuring including:
- Commercial syndication and co-financing with Development Financial Institutions (DFI) partners
- Risk mitigation
- New business screening support
- Development of new products
- Financial and economic modeling for infrastructure and industries and services projects
- Results design, definition and reporting
The Portfolio Management Division
The portfolio Management Division is assigned primary responsibility for the management of the Bank’s non-sovereign portfolio (private sector portfolio, enclave project portfolio, non-sovereign public portfolio and public sector equity investments) from first disbursement of a project until the project is completed.
The AfDB’s portfolio management division is a team of economists with wide finance experience operating in transaction administration, project management, workouts and exposure management.