Africa Growing Together Fund provides $50 million loan for Special Agro-Industrial Processing Zones Program, Phase I (SAPZ I) (Linked to Umbrella 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 Umbrella Record 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 administered by AfDB. Then, on June 30, 2022, AGTF signed a $50 million loan agreement (ID#5050130000101) with the Government of Nigeria for Special Agro-Industrial Processing Zones Program, Phase I (SAPZ I). On the same day, the African Development Bank (AfDB) issued a $160 million loan to the Government of Nigeria for the same project. The borrowing terms of the AGTF loan are as follows: a 25-year maturity, an 8-year grace period, an interest rate of 6-month LIBOR plus a 1% margin, a 0.25% commitment fee, and a 0.25% upfront (management) fee. The first phase of the Special Agro-Industrial Processing Zones (SAPZs) Program will be implemented in seven (7) states (Cross River, Imo, Kaduna, Kano, Kwara, Ogun, and Oyo) and the Federal Capital Territory (FCT). The program development objective is to support inclusive and sustainable agro-industrial development in Nigeria. The program has four broad components namely: (i) Support the development of enabling climate adapted infrastructure for Agro-Industrial Hubs (AIHs), (ii) Improve agricultural productivity and enterprise development to enhance agricultural value chains and job creation in the SAPZ Catchment Areas, (iii) Support Agro-Industrial Zone Policy and Institutional Development, and (iv) Program Coordination and Management. The key expected outputs of the SAPZ Program (Phase I) are: development of infrastructure for eight Agro-Industrial Processing Hubs (AIHs), fifteen Agricultural Transformation Centers (ATCs), 2,300ha of irrigated lands and farm to market access roads; supply of certified agricultural inputs and extension services; skills development for farmers and Micro, Small and Medium Scale Enterprises (MSMEs), an updated agro-industrial zone policy, and establishment of regulatory institution/special regulatory regime. The project officially commenced ('became effective') on October 17, 2023. However, the first loan disbursements to four Nigerian states (via SLAs or subsidiary loan agreements) did not take place until June 2024. SAPZ Program (Phase I) — also known as SAPZ I — was originally scheduled to commence in April 2022 and reach completion in April 2027.