The African Development Fund (ADF), the concessional window of the African Development Bank Group (AfDB), has approved loans amounting to Sh3.8 billion ($37.2 million) to cover related credit risk for projects in Kenya, Sudan and Senegal.
Businesses covered are in agriculture as well as those in the small and medium enterprises (SME), the bank said in a statement.
“The board of directors of the African Development Fund (ADF), the concessional window of the African Development Bank Group, approved on January 15, 2020, credit risk participations by the Private Sector Credit Enhancement Facility (PSF) for projects in Kenya, Sudan and Senegal,” said the bank.
“The agreement covers operations cumulatively valued at $37.2 million and includes a corporate loan to support an East African agribusiness firm’s domestic and regional expansion and two lines of credit targeting SME borrowers.”
The bank, however, did not give a breakdown of the specific amounts to go to each country.
Launched in 2015 by the ADF, the PSF provides credit risk participations in low-income countries and is well on its way to building a $1.5 billion portfolio of exposures. This means it acts as an insurance facility for loans.
“The approval of these operations brings the PSF’s total portfolio to $733.25 million, comprising risk exposures in 47 operations amounting to roughly $2.6 billion of total on non-sovereign operations (NSO) loans,” said the bank.
Under the NSO policy, the bank may provide financing or investment without a sovereign or State guarantees to private and public entities that meet specific eligibility requirements.
“We continue to advance the African Development Fund’s mission to strengthen development impact by creating opportunities for the private sector to invest in low-income countries,” said PSF administrator Cecile Ambert.
The bank said the approved operations were selected because of high potential to increase food production, deepen regional trade, and spur job creation, particularly for women and young entrepreneurs.