Browsing: Financing

TUNIS, Tunisia, May 24, 2013/African Press Organization (APO)/ — The African Development Bank (AfDB) (http://www.afdb.org) has launched its second Uganda-shilling denominated bond on the domestic capital market. The UGX 12.5 billion bond is opened for subscription until the 27th of May. It is the latest issuance under the UGX 125 billion Medium-Term Note (MTN) Programme originally established in mid-2012. The MTN approach was adopted to allow the Bank to regularly tap into the Ugandan capital market, issuing various tranches, rather than standalone transactions thereby minimizing costs for its clients and reducing the lead time necessary to access the market.

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The AfDB return to the Uganda market reflects local demand for additional debt instruments and the need for local currency financing to push infrastructure and other development projects. Pierre Van Peteghem, the Bank Group Treasurer, heralds this issuance as just the beginning of his department’s push to avail more local currency to private sector clients. “The Bank has recently approved an additional five African currencies including the Ghanaian Cedi and the Franc CFA for both West and Central African zones as official lending currencies of the Bank. This brings the total number of African currencies in which we can on-lend to clients to ten. This will enable us to better respond to client needs, particularly with respect to mitigating foreign exchange risk posed by hard currency loans. We believe by directly issuing local currency bonds, we also play a key role in developing the local capital market.”

Arranged by African Alliance and executed as a tap sale on the original UGX bond issued in July 2012, this most recent note will be linked to the new two-year bond that the Government of Uganda intends to launch on May 23, but will re-price every two years at 85% of the weighted average yield to maturity on the latest Ugandan government bond benchmark, noted Olivier Eweck, Manager of African Currency Funding in the Treasury Department of AfDB. Similarly to the first tranche, this issuance will also be launched at sub-government levels. “We expect a high demand from local and international investors, even higher than for last year’s first tranche,” says Eweck. The first re-pricing exercise will take place in August 2014.

The AfDB plans to launch two new MTN local currency programmes in Nigeria and Zambia in the coming months. Since its first African currency loan in 1998, the Bank’s local currency loan portfolio totals the equivalent to over USD 2.4 billion. The Bank is however keen to diversify its local currency portfolio across all African regions beyond the South African rand which now dominates the local currency loan book and is the multilateral lender’s third largest lending currency. As part of the Local Currency Initiative established in 2006, the AfDB has received approvals to issue in the local capital markets of Tanzania, Ghana and Kenya, among other countries and hopes to enter many of these markets in the short to medium-term.

Distributed by the African Press Organization on behalf of the African Development Bank (AfDB).

About the African Development Bank Group

The African Development Bank Group (AfDB) (http://www.afdb.org) is Africa’s premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 29 African countries with an external office in Japan, the AfDB contributes to the economic development and the social progress of its 53 regional member states.

For more information: http://www.afdb.org

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TUNIS, Tunisia, May 23, 2013/African Press Organization (APO)/ — The Board of Directors of the African Development Bank (AfDB) (http://www.afdb.org) approved on Tuesday, May 22, a USD 100 million unfunded Risk Participation Agreement (RPA) between the AfDB and Commerzbank AG under which the two banks will share the default risk on a portfolio of qualifying trade transactions originated by issuing banks in Africa and confirmed by Commerzbank AG. This facility will help address critical market demand for trade finance in Africa by providing support for trade in vital economic sectors such as agribusiness and manufacturing. It will foster financial sector development, regional integration, and increase government revenue generation ultimately improving Africa’s sustainable economic growth.

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The majority of African banks have small capital bases which constrain their ability to obtain adequate trade limits from international confirming banks and to undertake sizeable transactions that have significant development impact. Moreover, despite the growth in trade risk distribution globally, local banks in Africa have not significantly benefitted from this growth. AfDB’s additionality lies in the use of its “AAA” rating to share trade risk and expand the trade finance capacity of banks in Africa, thereby expanding trade and strengthening regional integration.

This RPA facility, running over a 3-year period, is 50/50 risk sharing arrangement that will enable Commerzbank AG to match AfDB’s undertaking in every transaction, thereby creating a maximum portfolio of up to USD 200 million. The facility will also result in the provision of significant support to African banks and SMEs. Counting roll-overs, it is expected to facilitate about USD 1.2 billion of trade in equipment, raw materials, intermediate and finished goods over the 3-year period.

Moreover, the proposed facility aligns with AfDB’s Regional Member Countries’ priorities to promote trade as was reaffirmed by the African Union at its 18th Ordinary Session in January 2012. It is also in line with the Bank’s Ten-year Strategy and Regional Integration Strategies which seek to consolidate its engagement in trade finance in Africa.

Distributed by the African Press Organization on behalf of the African Development Bank (AfDB).

About Commerzbank AG: Commerzbank AG is a leading international bank headquartered in Frankfurt, Germany. It is a leading provider of trade finance in Africa with a trade portfolio of approximately of USD 6 billion and an active network of over 500 correspondent banks on the continent. Commerzbank AG captures significant trade flows in Africa and it is one of the leading European banks in terms of LC issuance and reimbursement in Africa. It has six representative offices in Africa located in Cairo, Tripoli, Addis Ababa, Lagos, Luanda, and Johannesburg. Commerzbank AG’s long term ratings are A2/P-1 (Moody’s), A/A-1 (S&P) and A+/F1+ (Fitch).For further information please visit: www.commerzbank.com

Contacts Information: Sabrina Hadjadj Aoul, Senior Communications Officer, T. +216 71 10 26 21 / C. +216 98 70 98 43 / [email protected] – Yaw Kuffour, Lead Trade Finance Specialist, T. +216 71 10 22 85 / [email protected]

Press releases are also available in the Bank’s website at http://j.mp/AfDB_Media

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ACCRA, Ghana, May 22, 2013/African Press Organization (APO)/ — IFC, a member of the World Bank Group, today announced a new agreement with Advans Ghana Savings & Loans Ltd to expand access to the Business Edge training program in Ghana. The program will help entrepreneur’s gain the skills needed to succeed and supporting small business growth in the country.

The agreements will allow 240 SME’s to access world-class management training, run more efficient businesses and improve staff productivity.

Business Edge is an important part of IFC’s strategy to support smaller businesses in Africa. The interactive product has already helped more than

100,000 entrepreneurs in emerging markets improve their skills and

profitability.

Mary-Jean Moyo, IFC Country Manager for Ghana, said, “IFC places high priority on encouraging entrepreneurship in Ghana, which is supported by new partnerships and the expansion of the Business Edge solution. More robust small and medium enterprises are critical to creating jobs and generating growth for Ghana.”

Support for Business Edge is part of a broader effort by IFC to support the conditions for smaller businesses. Through efforts to encourage efficient and effective regulation in areas such as licensing, registration and taxation, IFC and its partners aim to improve entry points and other building blocks for small business success.

To improve access to finance, IFC collaborates with local financial intermediaries that enable SMEs to grow their businesses with affordable and tailored credit and investment. Inadequate access to finance constrains growth of small and medium businesses in Ghana and hinders job creation.

Only 22 percent of all Ghanaian firms have access to a line of credit, a figure that falls to 13 percent among smaller companies.

About IFC

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org.

About Business EdgeTM

IFC Sustainable Business Advisory Services is supporting the growth of small and medium enterprises. Working with partners in Africa, IFC has helped thousands of entrepreneurs access the finance and skills they need to realize their potential. Business Edge™ is a face-to-face IFC training system that helps SMEs more easily access markets by strengthening their management capacity. The training can be customized for specific countries and regions in Africa. For more information, including a full list of ourcorporate partners and accredited training firms, visit

www.businessedge-africa.com.

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WASHINGTON, May 22, 2013/African Press Organization (APO)/ — On the first day of an historic joint United Nations/World Bank Group mission to the Great Lakes region, the World Bank Group announced $1 billion in proposed new funding to help countries in the region provide better health and education services, generate more cross-border trade, and fund hydroelectricity projects in support of the Great Lakes peace agreement that was signed by 11 countries in February.

World Bank Group President Dr. Jim Yong Kim, who is traveling with the UN Secretary General, Ban Ki-moon, on a three-day trip to the Democratic Republic of Congo (DRC), Rwanda, and Uganda, said that a secure and developed Great Lakes region was vital to Africa’s efforts to dramatically reduce extreme poverty and create prosperity for millions who have had little economic opportunity.

“We made extraordinary efforts to secure an additional $1 billion in funding because we believe this can be a major contributor to a lasting peace in the Great Lakes region,” Kimsaid. “This funding will help revitalize economic development, create jobs, and improve the lives of people who have suffered for far too long. Now the leaders of the Great Lakes region, by restarting economic activity and improving livelihoods in border areas, can boost confidence, build economies, and give new opportunities for millions of people.”

Kim said the new regional pledge, in zero-interest financing from the International Development Association* or IDA, will support two major regional development priorities: recovery of livelihoods to reduce the vulnerability of people living in the Great Lakes whose communities have suffered greatly during conflict in the region; and revitalizing and expanding cross-border economic activity to spur greater opportunity and integration in the areas of agriculture, energy, transport and regional trade.

The World Bank’s proposed additional funding includes roughly $100 million for supporting agriculture and rural livelihoods for internally displaced people and refugees in the region; $340 million to support the 80 megawatt Rusumo Falls hydroelectric project for Burundi, Rwanda, and Tanzania; $150 million for the rehabilitation of the Ruzizi I and II hydroelectric projects and financing for Ruzizi III, supplying electricity for Rwanda, Burundi, and DRC; $165 million toward building roads in DRC’s North and South Kivu and Province Orientale; $180 million for improving infrastructure and border management along the Rwanda-DRC border; and additional millions of dollars for public health laboratories, fisheries, and trade facilitation programs among others.

While other parts of sub-Saharan Africa are experiencing high growth rates, countries of the Great Lakes region have had extremely high levels of poverty and very low levels of key services such as access to electricity. Yields from agriculture also are typically quite low. A key part of the World Bank Group’s development approach to the region is to increase power generation and interconnectivity to take advantage of low-cost and renewable sources of hydropower and geothermal energy. Developing the hydropower potential in DRC, in particular, will provide Burundi and Rwanda access to low-cost power and a stake in regional stability. Currently, there is no regional grid and very limited interconnectivity between countries in the region.

In Kinshasa, UN Secretary-General, Ban Ki-moon, warmly welcomed the World Bank Group pledge.

“Many countries in Africa are taking dynamic forward strides, and now the people of the Great Lakes region, especially the DRC, deserve their full chance for progress. A peace agreement must deliver a peace dividend. That is why Dr. Jim Kim and I are making this visit. We see a horizon of hope for the people of the Great Lakes, and we are determined to help them every step of the way,” said the UN Secretary-General.

Cross-border trade key to peace

In announcing its new funding pledge, the World Bank Group said that promoting significantly more trade is in the common interest of all countries in the region and will greatly improve the effectiveness of national development policies.

“Together with much more electricity for the Great Lakes, there will be very large economic pay-offs if we can all help to make border crossings easier and faster for people and their goods to move from one country into another,” said Makhtar Diop, the World Bank’s Vice President for Africa, who is accompanying President Kim and the UN Secretary General on their fact-finding mission.

“Africa’s potential to provide food for its citizens, however, is not yet being realized because farmers in areas like the Great Lakes face more trade barriers in getting their food to markets across the region than farmers anywhere else in the world,” Diop said. “Too often borders get in the way of getting plentiful food supplies to homes and communities that are struggling with too little to eat.”

Improving roads will also help trade and people’s livelihoods

In calling for a regional peace and development solution for the Great Lakes, the World Bank officials said the new financing pledge will help to rehabilitate roads to connect remote trading communities with regional markets.

Bank support will focus on rehabilitation of primary cross-border trunk roads, to be complemented through the rehabilitation and opening of secondary roads required to bring goods to markets. The benefits of this approach are two-fold: first, increased trade will significantly increase economic activities, livelihoods and jobs; second, connectivity will allow free movement of people and goods, and enable restoration of the state’s regulatory functions.

Within the DRC, the Bank Group’s current roads project (Pro-Routes -US$248 million) is having an important impact by contributing to the reopening of 2,176 km of roads in Province Orientale, South Kivu and Katanga. The economic impact of the rehabilitated sections has been significant, reducing transportation costs by as much as 80 percent in some cases and cutting travel time by more than half. Empirical evidence suggests that insecurity is decreasing in areas where roads have been rehabilitated.

Renewed opportunity for peace in the Great Lakes

Mary Robinson, the Special Envoy of the Great Lakes Region of Africa, who is also part of the fact-finding trip with Ban Ki-moon and Jim Yong Kim, endorsed the World Bank Group’s new development commitment to the Great Lakes and its people.

“There is a fresh chance to do more than just attend to the consequences of conflict,” Robinson said. “There is a chance to resolve its underlying causes and to stop it for good. If this new attempt is to succeed where others have fallen short, there must be optimism and courage in place of cynicism. The governments and the people of this region, and the international community, must believe once again that peace can be achieved, and be determined to take the necessary and well-coordinated actions to obtain it. ”