Africa Growing Together Fund provides EUR 26.8 million loan for Water Valorisation for Value Chain Development Project (PROVALE-CV) (Linked to Umbrella Project ID#36104)

On May 22, 2014, the African Development Bank (AfDB) and the People's Bank of China (PBOC) signed an agreement for the Africa Growing Together Fund (AGTF) (see Umbrella Project ID#36104). The purpose of this $2 billion loan facility was to finance large development projects in Africa between 2014 and 2024. The AGTF is sponsored by the PBOC and the administered by AfDB. Then, on August 14, 2019, AGTF signed an EUR 26.8 million loan agreement (ID#5050200000851) with the Government of Senegal for the Water Valorisation for Value Chain Development Project (PROVALE-CV). On the same day, the African Development Fund (ADF) issued an EUR 60.83 million loan agreement (ID#2000200004352) to the Government of Senegal for (PROVALE-CV. The borrowing terms of the AGTF loan, which entered into force on November 24, 2019, are as follows: a 20-year maturity, a 5-year grace period, an interest rate of 6-month EURIBOR plus a 0.8% margin, a 0.25% commitment free, and a 0.25% upfront (management) fee. The first ADF and AGTF loan disbursements took place on February 17, 2020. IFAD, the OPEC Fund for International Development, and the Government of Senegal also provided funding for the EUR 122 million project. PROVALE-CV is the first project under Senegal's small-scale Local Irrigation National Development Programme (PNDIL). It will operate in three agro-ecological areas in the country (Les Niayes, the groundnut basin, and Casamance) and cover eight administrative regions (Kaolack, Fatick, Kaffrine, Diourbel, Thiès, Ziguinchor, Sédhiou and Kolda). The project aims to sustainably increase agricultural production, employment and incomes in rural areas through the use of surface and underground water. It involves the management of 12,730 hectares including 7,950 hectares fed by retention dams, 3,980 recovered hectares, 800 hectares of borehole-fed market gardens, production roadways, warehouses and pastoral infrastructure. It is expected have a direct impact on 38,000 households, or about 300,000 people, and create 28,000 decent jobs (30% of which will be for women and 40% for young people). Project implementation has commenced. However, the Covid-19 pandemic has led to implementation delays. The project was originally scheduled to commence in November 2019 and conclude in October 2024.

Additional details

1. The AfDB project identification number is P-SN-A00-013. 2. The project’s economic rate of return is estimated at 19.19%. 3. The French project title is Projet de valorisation des eaux pour le développement des chaines de valeur. 4. The all-in interest rate (.40%) was calculated by adding an 0.8% margin to the average 6-month EURIBOR rate in August 2019 (-.40%). 5. The margin of 0.80% is calculated by adding the Funding Cost Margin (unknown) to the Lending Margin (0.80%).

Number of official sources

5

Number of total sources

6