African and European banks sign agreement to boost private investments

The African Development Bank (AfDB) and the European Bank for Reconstruction and Development (EBRD) signed a partnership agreement on Monday to boost private sector financing in Africa, the two institutions announced.

"This agreement with the EBRD is very important to us because the biggest challenge for Africa is infrastructure, which has an estimated financing gap of between $68 and $100 billion a year," said Akinwumi Adesina, president of the ADB, quoted in a statement sent to Lusa.

The announcement of the partnership, which does not indicate a concrete amount for the financial aid, comes on the eve of the summit on the financing of African economies, which takes place on Tuesday in Paris, with dozens of African heads of state and several international financial institutions.

"The MoU will help catalyze new sources of funding to help close the $2.5 trillion financing gap for development in Africa, which requires development finance institutions to work in partnership," the text further reads.

The two institutions pledge to use "their respective quality and expertise, with a particular focus on climate change, resilient and green infrastructure, and capital market development, while also working to improve the business environment, foster the real economy, and mobilize private sector investment."

Last month, the two banks had taken a first step towards this cooperation by jointly financing a $114 million photovoltaic plant in Kom Ombo, Egypt.

The ADB, one of the five main multilateral development banks in the world, was created in 1964, and has 80 shareholder countries (54 African countries and 26 non-African countries in Europe, America, and Asia), including Portugal.

Its European counterpart, the EBRD, was founded after the fall of the Berlin Wall to help former Soviet bloc countries convert to a market economy, and has since expanded its financing missions to 38 countries on three continents and is headed by former French treasury director general Odile Renaud-Basso.

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