- The Eastern and Southern African Trade and Development Bank (TDB) together with the European Investment Bank (EIB) have signed a US120 million SME funding deal.
- The fund will be used towards financing the cost of projects by the private sector, including small and medium enterprises (SME’s), with a special focus on climate action, renewable energy, and energy efficiency.
- The agreement was signed at the 9th ACP Summit of Heads of State and Government in Nairobi by EIB Vice President, Ambroise Fayolle, and Admassu Tadesse, TDB Chief Executive, and President.
“We are very pleased to be deepening our partnership with EIB” says Admassu Tadesse, TDB President and Chief Executive. “Alongside these lines of credit, we are also thankful for EIB’s technical assistance support to TDB via which world-class trainings were delivered to our staff, among other activities. Half of our portfolio is directly and indirectly contributing to SDGs; 70% of our energy portfolio is in renewables; and apart from our regular operations, we have recently launched an SME programme to address the missing middle-SME financing gap. Our multifaceted partnership with EIB will enable us to step-up our commitment to delivering triple-bottom line results in the region we serve.”
“The largest ever cooperation between the EIB and TDB will support a total of EUR 240 million of new investment across Africa. Scaling up climate related private sector investment is key for climate action and saving our planet. The new financing will accelerate investment in renewable energy, energy efficiency and clean transport by businesses in Africa. This is a model for private sector financing worldwide that demonstrates how new business investment can include climate action.” said Ambroise Fayolle, European Investment Bank Vice President.
In Eastern and Southern Africa and in most emerging markets, SMEs are by far the biggest contributor to employment and account for up to 40% of GDPs. They play a key role in driving competition and innovation in almost all sectors and are also crucial to industrial growth as they support the development of pools of skilled and semi-skilled labour forces.
This is the second line of credit to be extended by EIB to TDB, the first one having been signed in 2014 for EUR 80 million with a focus on SMEs and mid-cap companies, and already having created hundreds of jobs.
Author: Bryan Groenendaal
Source: TDB
