The European Investment Bank, the European Union’s long-term lending institution, has formally agreed to provide a EUR 60 million loan to enhance public and private sector operations by the West African Development Bank (BOAD). Finance contracts for the project were signed at the European Investment Bank headquarters in Luxembourg by Philippe Maystadt, President of the European Investment Bank and Christian Adovelande, President of the West African Development Bank.
The European Investment Bank funding will focus on supporting regional projects that promote economic integration in West Africa, including environmental schemes or renewable energy. The West African Development Bank is the development finance institution of the West African Economic Monetary Union (WEAMU), with operations in eight West African member states Benin, Burkina Faso, Ivory Coast, Niger, Senegal, Togo, Mali and Guinea-Bissau.
“The European Investment Bank is pleased to continue its strong and long-standing relationship with the West African Development Bank. Through this fifth credit line we will contribute both funding to benefit private and public sector projects across the region and specialist technical assistance on key environmental issues and expertise.” said Plutarchos Sakellaris, European Investment Bank Vice President responsible for lending operations in sub-Saharan Africa, the Caribbean and Pacific.
“The West African Development Bank is committed to alleviating poverty and promoting balanced development and regional integration of its member states. This operation with the European Investment Bank will make a significant contribution to funding projects essential for economic growth in West Africa and improving technical operations in specialised fields.” said Christian Adovelande, President of the West African Development Bank (BOAD).
This will be the fifth operation with the West African Development Bank funded by the European Investment Bank since the two institutions first cooperated in 1980. Before today’s agreement a total of EUR 62 million has been provided to the West African Development Bank by the European Investment Bank.
Under this initiative a EUR 60 million credit line will be used to fund significant public and private investment in energy, industrial, transport, agribusiness, tourism and other sectors. Individual projects will be able to borrow up to EUR 5 million under favourable conditions. Private sector projects will be able to access funds at market rates. Public infrastructure projects, with a regional or environmental focus, will be able to benefit from an interest rate subsidy, under regular arrangements to alleviate borrowing costs for Heavily Indebted Poor Countries in the region. European Investment Bank funding will cover 50% of project costs.
The project is expected to reduce the shortfall for scarce long-term investment funding and a strong pipeline of eligible projects has already been identified.
The EU-Africa Trust Fund will provide EUR 900,000 for dedicated technical assistance to develop specialist environmental expertise and evaluate sustainable development projects in West Africa under the programme. The European Investment Bank will also increase its stake in the West African Development Bank up to EUR 6.1 million.
This operation compliments additional resources recently provided to the West African Development Bank by the African Development Bank, French Development Agency, India and China.
A previous loan to the West African Development Bank for EUR 25 million was signed in 2004 and was fully disbursed within three years. The included funding for improved drinking water supply in Niger and Benin, expansion of power projects in Benin and Senegal, and rehabilitation of the Port of Dakar.