The African Development Bank (AfDB), the regional financing institution, which currently engaged aggressively in supporting regional integration of the continent through innovative financing mechanisms of infrastructure says, it is set to launch new financing vehicle.
The Bank, which is conducting its annual meeting in Marrakech, Morocco this week (May 27-31, 2013), is expected to reveal an innovative financing mechanism of 20 billion US dollars at the end of the meeting, according to Shem Simuyemba, Chief Infrastructure Economist at the AfDB.
“The Bank will use different innovative approaches which include mobilizing African sovereign funds, pension funds and issuing bonds,” he told journalists this morning at a press briefing session in Marrekach. Though the bank aims largely to mobilize funds from Africa in this new financing approach of the continents’ infrastructure, the door is also open for foreign financers, according Mr. Simuyemba.
The new financing approach is one of the means of attaining the 68 billion US dollars short-term of Program for Infrastructure Development in Africa (PIDA), which is approved by African heads of state in January 2012.
Alex Rugamba, Director of Regional Integration and Trade at AfDB, who also attended the session, on his part stated that the new innovative vehicle will focus on identifying fund generating means for commercially viable infrastructure projects in different African countries.
The Agreement establishing the African Development Fund (ADF) was signed on 29, 1972 by the African Development Bank and 13 non-regional countries, referred to as State Participants. At the end of 2008, the ADF comprised the AfDB itself and all the 24 non-regional members of the AfDB plus the United Arab Emirates, bringing the number to 25.
To become an AfDB member, non-regional States must first become ADF members. Only one ADF member state, the United Arab Emirates, is yet to accede to AfDB membership. The Fund’s resources come from contributions and periodic replenishments by State participants, usually on a three-year basis. At the final ADF-12 replenishment consultation held in Tunis on September 7-8, 2010, the donors agreed on a replenishment level of 9.5 billion US dollars for the three-year period 2011–2013.
