The Development Bank of Southern Africa (DBSA) and the Agence Française de Développement (AFD) in March signed a $100-million loan agreement aimed at furthering the DBSA’s infrastructure financing activity across Africa.
This flexible credit line will focus on DBSA’s four strategic sectors: energy, water, transport, and information and communication technology, with a particular focus on renewable energy and energy efficiency projects, partially owing to both entities’ commitment to supporting the resolutions made at the twenty-first Conference of the Parties (COP21) to the United Nations Framework Convention on Climate Change.
The 15-year loan is the seventh line of credit that AFD has signed with DBSA, and will provide partial finance for infrastructure projects. About 50% of the projects will be aimed at establishing and developing the green economy, including projects that advance climate adaptation and mitigation objectives.
As part of its efforts to strengthen the long-standing relationship between the two organisations, AFD will, through this loan, be supporting the growth of DBSA by providing financial resources, which will greatly strengthen DBSA’s capacity to integrate climate change in its financing activity and could also strengthen the operational partnership with AFD private sector subsidiary Proparco.
DBSA will, in turn, continue to advance its development impact on the continent by expanding access to development finance and catalysing infrastructure investments, thereby effectively integrating and implementing sustainable development solutions.
At the time, AFD CEO Rémy Rioux said the new credit line and expanded partnership with DBSA in favour of sustainable infrastructure financing was at the crux of AFD’s strategy in Africa: “We aim to finance and exchange expertise on projects that enhance sustainable development goals.”
He added that all the projects financed by this loan would further advance the AFD’s ideals of open development, job creation and education.
“The DBSA is committed to financing the continent’s infrastructure development goals. We value partnerships such as this one with the AFD to further accelerate our mandate,” said DBSA CEO Patrick Dlamini at the time.
He also commented that the DBSA would continue its attempts to foster relations between the South African government, private sector and commercial banks as part of its mandate to advance socioeconomic development in the SADC.
The organisations have made a concerted effort over the past year to increase cooperation, including through the cofinancing of eThekwini municipality’s Western and Northern Aqueduct projects, with a R700-million 15-year loan.
The AFD noted that infrastructure financing for the rest of the continent is a new area of cooperation for AFD and DBSA and takes the 23-year partnership to a new level.
The AFD and DBSA confirmed earlier this month that the recent credit rating downgrades by ratings agencies Fitch Ratings and S&P Global would not have any impact on the loan repayment terms.