Portugal: State-AfDB-PALOP alliance to be renewed for five or 10 years – AfDB

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Portugal: State-AfDB-PALOP alliance to be renewed for five or 10 years – AfDB

11:13 CAT | 25 May 2023

File photo. AfDB

Moono Mupotola said that there were currently investment projects of “around US$7.5 billion (€6.97 billion), at various stages of implementation, in the six countries,” namely Angola, Mozambique, Cabo Verde, Guinea-Bissau, Sao Tome and Principe and Equatorial Guinea.

The Lusophone Compact, a partnership between the African Development Bank (AfDB), Portugal and Portuguese-speaking African countries (PALOPs ), will be extended for another five or 10 years, said an official from the bank on Wednesday.

The chairwoman of the Lusophone Compact Steering Committee, Moono Mupotola, told Lusa that this extension was one of the results of a meeting on the work of this partnership, aimed at accelerating private sector growth and infrastructure development in the six Portuguese-speaking African countries (PALOP).

“The partnership was approved for five years, from 2018 to 2023. In December it would come to an end. But the guidance of the steering committee was that it would like to see it continue, and not just for five years, but perhaps for 10 years,” with only the legal terms of the bank left to see if it can be for a decade or just for five years, she explained.

The also Director of Regional Integration at the African Development Bank, who is participating in Sharm El Sheikh, Egypt, in the annual meetings of the AfDB Group, as part of which the fifth meeting of the Lusophone Compact Steering Committee was held, justified the renewal with the realisation that “it takes time for some of the activities under the pact to actually bear fruit.

Moono Mupotola said that there were currently investment projects of “around US$7.5 billion (€6.97 billion), at various stages of implementation, in the six countries,” namely Angola, Mozambique, Cabo Verde, Guinea-Bissau, Sao Tome and Principe and Equatorial Guinea.

“The most important thing is that we are looking for more investment projects, we are looking for more capacity, technical assistance and capacity building projects. It’s very important for most of these projects. We make compacts because, firstly, they are (projects) very small in size and secondly, they are not ready in terms of development,” she said.

The chair of the Lusophone Compact Steering Committee also revealed that “there was an agreement in principle by the government of Portugal to continue to support,” extending the financial guarantee of €400 million for investments in the PALOP countries, under this partnership.

This guarantee for the Lusophone Compact was approved in 2020 but only in 2022 had the approval of the ‘rating’ agencies.

“The question for us when we look at the extension of the €400 million guarantee is, how do we look at some of the conditions,” because, Mupotola recalled, there are “specific conditions for the guarantee to come into effect”.

“If it is not possible to review (the conditions), we can then look at how it will be used in collaboration with some of the banking instruments in order to improve the functioning,” with the role of the International Finance Corporation (IFC), the first institutional partner of the PALOP Development Finance Compact, being important here.

Signed in November 2018, the Lusophone Compact is an investment platform and partnership between eight parties, committing them to contribute to accelerating private sector growth and infrastructure development.

Source: Lusa