The activities of the Private Sector comprise two categories:
- Non-sovereign guaranteed (NSG) lending activities in the area of Industries & Services, PPPs & Infrastructure
- Non-lending activities include studies, initiatives and new programs.
Lending activities are directed to privately-owned as well as (in selected cases) publicly-owned beneficiaries.
Assistance to Private Entities
Bank assistance is provided directly to private entities (enterprises financial intermediaries) through term loans, equity participations, quasi-equity investments, guarantees, syndications, underwriting and advisory services.
Bank assistance may be considered for projects to establish, expand, diversify and modernize productive facilities in various sectors including energy, manufacturing, agribusiness, tourism, transportation, infrastructure, extractive industries, as well as in banking and finance and other service industries, as long as the investment is beneficial to the economy of the host country. The Bank does not participate in real estate development projects (except for low-income housing) nor provide direct trade financing. However, the Bank may invest in domestic or regional financial and capital market institutions, which support such activities; or alternatively, extend agency credit lines for such purpose. In selecting projects, the Bank gives consideration to financially and economically viable proposals, which primarily contribute to one or more of the following:
- Generation of foreign exchange earnings and savings
- Job creation, skills; improvements; and enhancement of productivity of capital and labor
- Transfer of technology and acquisition of appropriate scientific equipment
- Forward and backward linkages enhancement.
To be involved in a project, the Bank needs to be satisfied that the project is consistent with the country's economic development objectives, has sufficient comparative advantage and is likely to succeed in a sustainable manner. The Bank will satisfy itself that the project concept, technology, sponsorship and management are sound, that solid market and marketing arrangements exist for the products or services, that the project cost is reasonable and the financing plan is adequate. In making investment decisions, the Bank takes into account the economic circumstances in the country concerned, and the policies of the government as they affect private enterprises.
In addition, projects in which the Bank invests are required to comply with the Bank's Group Environment Assessment Guidelines and the prevailing environmental regulations of the country.
Assistance to Public Entities
The Bank, under its Private Sector Window, can lend under commercial terms to publicly owned entities (financial institutions, utility companies, municipalities, etc.) provided that these entities:
- do not require a sovereign guarantee
- are financially sound and viable
- are autonomously managed.
Recent examples are a US $ 50 million line of credit to the Industrial Development Corporation (IDC) of South Africa, a Yen 5.5 billion line of credit to the National Development Bank of Botswana (NDB) and a US $ 100 million line of credit to the Development Bank of Southern Africa (DBSA).
Fonds d’assistance au secteur privé africain (FAPA)
Le fonds d’assistance au secteur privé africain (FAPA) est un fonds thématique fiduciaire multi-donateurs. Il vise à soutenir la mise en œuvre de la stratégie de développement du secteur privé de la Banque africaine de développement (BAD) par l'octroi de dons non liés d’assistance technique et de renforcement des capacités. Cette assistance va aux gouvernements africains, aux communautés économiques régionales et aux organisations intergouvernementales similaires. Le fonds appuie aussi les associations professionnelles, les institutions de régulation du marché, les fournisseurs de services de développement et la formation des entreprises, les institutions de recherche et les entreprises publiques / privées. Les dons octroyés par FAPA améliorent la capacité de la BAD à être plus actifs dans les phases de préparation des projets, renforçant ainsi la qualité du portefeuille des transactions du secteur privé susceptibles d'être financées. Les ressources peuvent également être utilisées pour promouvoir des programmes novateurs qui appuient notamment les petites et micro-entreprises et les technologies vertes, y compris la fourniture de capital d'amorçage pour les start-ups, les incubateurs d'entreprises, etc.