The African Development Bank (AfDB) and the Government of Japan have announced a joint target to provide $3 billion for private sector development in Africa during the next three years under the third phase of the Enhanced Private Sector Assistance for Africa (EPSA) initiative.
EPSA is a framework to support implementation of AfDB’s Strategy for Private Sector Development built around the components: The Accelerated Co-Financing Facility for Africa (ACFA); The Non-Sovereign Loan (NSL); and The Fund for African Private Sector Assistance (FAPA).
Designed in partnership with the Government of Japan, EPSA draws on successful experiences in Asia and around the world. It was launched at the G8 Summit in Gleneagles in 2005.
Japan will provide $1.5 billion through the Japan International Cooperation Agency (JICA) with AfDB matching the amount in the same period.
Japan is ready to provide an additional $300 million for co-financing with the AfDB to enable African countries access the best available low emitting clean coal technologies.
“This is a significant expansion of our support to the private sector, which will play a critical role in Africa’s economic transformation,” AfDB President Akinwumi Adesina commented. “The scaling up of the Enhanced Private Sector Assistance for Africa Initiative will help increase access to electricity, boost the industrialization of the continent and improve the quality of millions of lives in Africa. These are all key components of our High 5s.”
The High 5s are AfDB’s five areas of focus to advance the agenda of the continent’s economic transformation in the next decade. They are Light up and Power Africa; Feed Africa; Integrate Africa; Industrialize Africa; and Improve the quality of life for the people of Africa.
Japan’s State Minister of Finance Taku Otsuka added, ““We look forward to continued close collaboration with the AfDB so as to further accelerate the development of the African private sector, by delivering resilient and high-quality infrastructure and strengthening the health system.”
The initiative is expected to substantially increase the resources devoted to boosting economic growth and fight poverty on the continent.
The third phase of EPSA will focus on economic infrastructure (such as transport, energy); and social infrastructure (including health, education and nutrition).
Japan provided $1 billion of concessional loans under EPSA-1 (2005-2011) and is providing $2 billion under the current EPSA-2 (2012-2016).
The announcement was made at the ongoing TICAD VI Summit in Nairobi, the first-ever on African soil.