The EIB will provide 150 million Euros for a new lending programme that will see businesses secure foreign currency. The bank which is the world’s largest public lender and owned directly by European Union member states formally signed the grant with the same amount to be provided by PTA Bank, a trade and development financial institution in Africa.
During an interview with CNBC Africa Pat Walsh a director at EIB said that the aim of the programme is to, “help finance new companies that want to expand. With the view to promote innovation, create jobs and poverty alleviation.”
In addition the scheme is expected to offer both foreign and local currency long-term loans and will see a wide range of sectors eligible. This is said to be the largest such lending initiative ever to be agreed by the EIB in Africa.
“The criteria of choosing the projects will be to discuss with PTA Bank about the projects in the pipeline and choose according to priority. Provide technical funds to PTA Bank to help promote, identify and appraise projects,” Walsh said.
Moreover, firms interested in the lending programme will have to contact PTA offices in their local country to see how they can apply and what needs to be done. Some of these countries are Eritrea, Ethiopia, Mozambique, Zambia and Kenya.
“Due diligence has been carried out on PTA Bank. Stringent clauses are also in the agreement against corruption and fraud,” Walsh explained.
The EIB has been working closely with leading banks and financial institutions across Africa. Last year the lender provided 1.1 billion Euros for investment in sub-Saharan Africa which supported a number of investments both in the private and public sector.
Admassu Tadesse, president of PTA Bank said in a statement, “We are delighted to join forces with the EIB to give a much needed boost to increased investment in the real economies of eastern and southern Africa which is key to job creation and economic transformation.”
“This programme is a strong addition to other lending programmes we have launched with other funding partners.”