Africa Growing Together Fund commits EUR 7.5 million loan for on-lending purposes (Linked to Record ID#36104)

Project narrative

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 the umbrella project, Record ID#36104). The purpose of this $2 billion loan facility is to finance large development projects in Africa between 2014 and 2024. The AGTF is sponsored by the PBOC and administered by AfDB. Then, on November 25, 2021, AGTF signed a EUR 7.5 million loan agreement with the Banque Nationale pour le Développement Economique (BNDE) — a Senegalese state-owned bank — for on-lending purposes. On the same day, the African Development Bank (AfDB) issued another EUR-denominated loan to BNDE. The borrowing terms of the AGTF loan are follows: a 6-year maturity, a 2-year grace period, and an unknown interest rate. The purpose of the loan is to provide BNDE with stable resources to improve the coverage ratio of its long-and medium-term commitments. The expected beneficiaries of the loan proceeds from AGTF and AfDB include 14 SMEs from the agricultural, fishing, poultry and agribusiness sectors. Through these 14 sub-projects, the loan proceeds from AGTF and AfDB are expected to create 1,016 direct jobs — particularly among young people and women (30% of total jobs created). As part of the loan agreement the AfDB also agreed to assist BNDE in building the capacity of its agricultural credit officers, its risk management, project management, environmental and social management systems, and its system for the management of development results. Upon completion, this project is also expected to strengthen the agricultural value chain in Senegal, thereby reducing food imports and contributing to the achievement of the development objectives of the country’s ‘Emerging Senegal’ plan.