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africa|business|financial|innovation|manufacturing|services|sustainable|technology|equipment

EIB Global commits €62m for six high-impact private-sector investment initiatives in Africa

18th February 2022

By: Schalk Burger

Creamer Media Senior Deputy Editor

     

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Private-sector investment across Africa is essential to tackle the impact of Covid-19 and unlock sustainable growth and development finance institution the European Investment Bank (EIB) Global will provide €62-million as part of six new partnerships that will support targeted private-sector investment, including high-technology innovation, rural microfinance and business financing, from Cameroon to Malawi.

The partnerships provide new support for African technology startups, rural microfinance, agriculture and businesses in sectors impacted by the pandemic, the EIB says.

“The high-impact cooperation will back businesses across the continent, strengthen economic resilience to the impact of Covid-19 and build a better future. The European Union (EU) - Africa Business Forum ensures the impact of scaling up sustainable private-sector investment across Africa is recognised ahead of the EU-African Union summit,” says EIB president Werner Hoyer.

To accelerate investment in African technology startups, EIB is supporting two of Africa’s leading technology investors, namely Atlantica Ventures and Janngo, through the Boost Africa initiative. This is a joint initiative with the African Development Bank (AfDB), with financial support from the European Commission and the Organisation of African, Caribbean and Pacific States Secretariat.

The €12.5-million financing for Atlantica will support €50-million of new investment in innovative technology startup companies across the continent and expand specialist venture capital financing for promising entrepreneurs.

The new €10-million EIB commitment to Janngo will increase investment in early-stage tech and tech-driven startups to improve access to healthcare, education and financial services across Africa and allow African tech companies to create jobs for young people and women, the EIB says.

Further, the partnerships aim to support private-sector financing with local African banks. Smallholders across Malawi will benefit from €12.5-million EIB backing for long-term agricultural financing in cooperation with First Capital Bank and the EU.

The new programme, also supported by an EU grant, is the latest in a regional agricultural financing initiative. It will allow farmers in Malawi to modernise equipment and withstand challenges of a changing climate, the EIB says.

Additionally, a €12-million Covid-19 resilience business financing initiative with the Commercial Bank of Cameroon will support manufacturing, services, agriculture and trading companies across the Central African countries impacted by the pandemic by providing long-term financing essential for business expansion.

The EIB funding and partnerships are also aimed at ensuring access to finance in remote and fragile communities. Thousands of African entrepreneurs will benefit from local currency microfinance in rural areas, where access to financial services remains limited, through new EIB cooperation with the Grameen Credit Agricole Foundation and the European Solidarity Financing for Africa Fund (Fefisol).

The latest €10-million partnership between the EIB and the Grameen Credit Agricole Foundation will accelerate social inclusion and strengthen economic resilience to the pandemic, and is expected to support more than 36 000 jobs and enable 98 000 new loans to female entrepreneurs in disadvantaged communities across Africa.

The €5-million new financing for Fefisol will allow smallholder farmers currently excluded from mainstream financing to access microfinance through small rural microfinance institutions and fair-trade certified agricultural cooperatives in 25 African countries, the EIB says.

Additionally, the new European Solidarity Financing for Africa Fund, Fefisol 2, builds on the successful support for rural microfinance delivered through the EIB-backed Fefisol I, over the past decade, the bank adds.

Hoyer highlights the crucial need to scale up cooperation between African financial institutions and international partners to ensure that Africa’s private sector can drive economic and social growth.

“Ensuring that African startups, entrepreneurs, smallholders and businesses can harness new opportunities, create jobs and expand is essential for Africa, Europe and the world,” he says.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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