AfDB Group Approves US$ 293 Million for Infrastructure Development and Poverty Reduction
Tunis, 22 October 2008 – The Board of Directors of the African Development Bank (AfDB) Group on Wednesday in Tunis, approved US$ 293.4 million to Tunisia, Mozambique and Third Emerging Capital Partners Africa Fund (EAF 3) to boost infrastructure development and poverty reduction on the continent.
The Board, under the Bank Group’s Private Sector Window, approved the provision of a US$ 150 million senior to finance the Hasdrubal Oil and Gas Field Development Project, located in the Gulf of Gabes, 350 kilometres south-east of Tunis.
The project involves the construction of a standalone, concurrent gas, condensate, and oil system in the Gulf of Gabes in 62-meter water depth, approximately 100 km from the coast. Exploitation of the Hasdrubal field has only recently become viable due to prevailing high oil prices and improved estimates of available reserves.
Described as a timely priority by the Tunisian government the oil and gas project is well aligned with the Bank’s Country Strategy Paper for Tunisia and will help to satisfy the growing national demand for gas and the projected supply gap that currently drains foreign exchange reserves through imported energy products as well as create 1,200 local jobs. In addition to these direct economic benefits, the project is expected to have a substantial incremental impact by enhancing Tunisia’s competitive physical infrastructure.
The public-private partnership (PPP) financing structure is a first for Tunisia and should help develop future project finance transactions in the country.
For its part, Mozambique will benefit from a UA 60 million, equivalent to US$ 93.4 million loan, from the African Development Fund (ADF) to finance its second poverty reduction programme, which aims at improving governance, human capital and economic development by enhancing transparency and accountability in the use of public resources at the national and district levels.
The programme, supported by 18 other development agencies, will strengthen the capacity of the Supreme Audit Institution (Tribunal Administrative) and the District Consultative Councils to effectively perform their roles in line with the country’s decentralization framework under which districts will become the ultimate operational level of government. This requires building sustainable accountability mechanisms by strengthening institutions at both national and district levels.
Finally, the Board approved a US$ 50 million equity investment in the Third Emerging Africa Fund (EAF 3), a pan-African private equity fund managed by Emerging Capital Partners which is targeting a capitalization of over US$ 1 billion for the financing of infrastructure projects across the continent.
The EAF 3, incorporated in Mauritius, will be among the largest private equity funds in Africa and will mobilize risk capital and bring investment know-how to the continent to support the broad private sector development priorities of Bank Group Regional Member Countries.
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