Sh620bn for AfDB’s water, energy fund

Donors have agreed a massive $7.3 billion (Sh620bn) in funding for the African Development Bank for the next three years — an increase of US $1.5 billion on previous funding.

Representatives from 27 participating countries agreed the new funding at a meeting in Paris, which was attended by representatives from Kenya, Ghana, Malawi and Côte d’Ivoire as well as the AfDB ‘core’ group of 18 western countries and China, India, Brazil, Kuwait, Saudi Arabia, South Africa, Angola, Libya and Egypt.

The new funding will concentrate on connecting an estimated 20 million to reliable and affordable energy as well as enabling 7.5 million to have access to clean water and sanitation.

The new funding will also allow 3 million people to have opportunities for vocational and technical training and 7 million to benefit from increased agricultural productivity.

TOUGH BUDGET CHOICES

“I warmly welcome these pledges, which have been made at a time of tough budget choices,” said Donald Kaberuka, President of the African Development Bank.

“They represent a powerful signal of support for Africa, and for the Bank’s vision for inclusive and sustainable growth. They further strengthen our capacity to deliver on our ambitious agenda around infrastructure, economic integration, private-sector development, with greater emphasis on accelerating gender equality and addressing the challenges of fragility in Africa.”

Participants agreed on a replenishment amount of $7.3 billion for the 2014 to 2016 cycle, of which $1 billion will be dedicated to a special facility for fragile states.

They also welcomed the fact that African countries continued to increase their role in the Bank, with Libya and Angola joining South Africa and Egypt as contributors to the Fund.

Benoit Chervalier, Head of the Resource Mobilisation and Allocation Unit at the African Development Bank, said: “We are hopeful that even more African countries will be able to contribute to the Fund, particularly as ADF beneficiary countries transition to become middle-income economies. The continent is taking ownership of its own development.”

The ADF contributes to the promotion of economic and social development in the least-developed African countries by providing concessional funding for projects and programmes, as well as technical assistance for studies and capacity-building activities.

The new funding resources will be channelled through a mix of financing instruments best suited to the needs and capacities of its clients, including: project and program loans, grants and guarantees and multinational projects.

“The critical role of the AfDB Group in realizing Africa’s transformation and addressing vital issues of development, such as fragility, has never been more evident,” said Richard Manning, the coordinator of the latest funding programme.

“That is why — despite real constraints and budget cuts for most of the contributing countries — participants recognized the Bank Group’s relevance and efficiency, and expressed their strong support for and trust in the African Development Fund.”

French AfDB Governor and Treasury Director-General Ramon Fernandez concluded the meeting by saying: “AfDB Group is a regional public good, which plays a unique role in helping the African continent to reach its full potential.”