The Board of Directors of the African Development Bank (AfDB) on Wednesday approved in Tunis a capital subscription of Euro 3.05million and a Line of Credit (LOC) of Euro 40 million to the West African Development Bank (BOAD).
A statement from AfDB received in Accra said the financial assistance package had three components – participation in capital increase, a LOC and institutional support.
It said the project would build the financial and institutional capacities of BOAD, thereby enabling it to contribute effectively to growth to accelerate the economic and social development of WAEMU member states.
BOAD is a regional financial institution which provides financing for the economic development of the West African Economic and Monetary Union (WAEMU) member states by diversifying its sources of finance.
The statement said LOC would finance sub-projects in agribusiness, manufacturing industry, mining, and services (hotel, trade and telecommunications).
“The investments will generate many economic benefits, such as job creation, increased value added of products and development of exports by member states.
“The socio-economic contribution expected from these investments includes the improvement of living conditions of the population of member states where the plants would be set up.”
The statement said the financial support was in line with the poverty reduction vision of the AfDB, whose development strategy hinged on regional economic integration.
“It is also consistent with NEPAD objectives. The LOC is consistent with the Bank’s private sector development strategy and reinforces its role of providing financial intermediaries with long-term resources and technical assistance to promote access to medium and long-term credit for private sector projects, thereby building their institutional capacity. “Consequently, the institutional support offered, complements that of other development partners.”
The statement said the institutional support would enable BOAD to establish sound management practices that will help its financial performance.
“It will thus become a partner of the Bank in the financing of development by serving as banking intermediary of the private sector in the WAEMU zone,” AfDB said.