AfDB takes three Lusophone projects to Africa Investment Forum in Johannesburg, South Africa – Mateus Magala

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AfDB takes three Lusophone projects to Africa Investment Forum in Johannesburg, South Africa – Mateus Magala

3:26 CAT | 04 Nov 2019

FILE: AfDB in Abidjan. [File photo: Lusa]

The vice president of the African Development Bank (AfDB) and coordinator of the Lusophone Compact for Development said that three projects will be presented at the Africa Investment Forum, including a 30 million credit to Mozambique.

“We have three or four projects that are ready to be submitted in Johannesburg, and we hope they will be approved in terms of investor appetite,” Mateus Magala announced in an interview with Lusa in Abdijan, Ivory Coast, on the sidelines of the extraordinary shareholders meeting being held to approve an AfDB capital increase.

“The credit line for Mozambique will certainly be approved by the AfDB Board of Directors this month. Only after the credit line is approved will operators be able to finance projects in the key areas of the bank’s line of business,” he added. The Mozambican banker also announced projects in Angola and Sao Tome and Principe that will be debated in Johannesburg, but without providing details.

The US$30 million (€26 million) credit line, which will be managed by BIC bank, is the first project to be approved under the Lusophone Development Compact, an innovative AfDB financing model with guarantees from the Portuguese State for projects implemented in the Lusophone African countries: Angola, Cape Verde, Guinea-Bissau, Equatorial Guinea, Sao Tome and Principe and Mozambique.

“The projects to be approved by the council must go through a local process and be located in a Lusophone country. Each country already has a committee composed of the bank, the national authorities and Portugal, which scrutinises projects and decides if they are aligned with the bank’s and the country’s strategy, and the Compact’s intent, which is to promote the private sector in these countries,” Magala explained.

The Africa Investment Forum will be held from the 11th to 13th of this month in Johannesburg, with the aim of finalising business and investment in Africa. Last year’s meeting prompted 49 deals worth nearly US$40 billion (€35 billion).

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The Lusophone Compact initiative was launched at the end of 2017 by the AfDB and the Portuguese government to finance projects in Lusophone countries with AfDB financial support and with guarantees from the Portuguese state, thus ensuring financing with lower costs and less risk.

The AfDB, Mozambique and Portugal signed the first agreement in Maputo on March 12. The first project under consideration in Mozambique is a US$30 million credit facility managed by BIC bank.

In addition to the host country – which must be one of the Portuguese-Speaking African Countries (PALOPs) – each project must involve “at least two more Compact entities – for example the AfDB and Portuguese companies, or the AfDB and other PALOP companies,” documentation concerning the programme reads.

Portugal participates through its own Development Finance Society (SOFID) scheme, providing €400 million in guarantees, then combined with AfDB financing, which in this Compact will support projects budgeted at up to US$30 million. The AfDB will usually finance projects exceeding that amount.

Equatorial Guinea was the last African Lusophone country to sign the document, on 7 October.

Source: Lusa