Out-Law News 2 min. read
04 Sep 2015, 10:06 am
Akinwumi Adesina said in his inaugural speech as AfDB president (12-page / 233 KB PDF) on 1 September that “unlocking the huge energy potential of Africa” will be a priority as the bank looks for partnerships with the private sector to increase investment in solar, wind, hydropower and geothermal projects.
Adesina, a former Nigerian agriculture minister who is the AfDB’s eighth president, said: “We must light up and power Africa. Energy is the engine that powers economies... We will be bold, creative, build strategic partnerships on energy for Africa and harness resources from the public and private sectors.”
The AfDB will also launch a “new deal on energy” for Africa, Adesina said. “By developing financial markets and leveraging private capital markets, businesses will be able to access long term financing crucial to invest in needed machinery, equipment and working capital.”
Adesina said that “revamping rural infrastructure, expanding rural energy, mobile telephony and access to finance will speed up income growth, employment, financial inclusion, and education and boost quality of life all across our rural areas”.
The AfDB will become “more than a lending institution”, Adesina said. “We will build a highly competitive, world-class knowledge-driven bank, to provide top-notch policy and advisory services to countries and the private sector. We will become a true development institution with measurable impacts on the lives of Africans.”
Adesina said the development finance landscape is “changing rapidly and the bank must change with the times”. He said: “We must remain competitive and we must lead. To do so, we must develop and deploy business processes that make us much faster in delivering financial and non-financial products and services to our clients. We must become the leading voice for development finance for Africa – supporting greater aspirations for Africa and mobilising resources, within and outside of the continent, for Africa’s growth and development.”
The AfDB group said it currently manages the equivalent of more than $14.12 billion worth of liquidity, which is invested in a wide range of currencies and “subdivided in various portfolios with different investment horizon, objectives and guidelines”.
The AfDB uses a ‘unit of account’ (UA) equivalent to the International Monetary Fund’s special drawing right (SDR) as its reporting currency. The value of the SDR is based on a basket of major international currencies. As of 3 September 2015, SDR 1.00 was worth the equivalent of $1.40.
According to the AfDB, the group’s loan approvals for projects in 2013 amounted to UA 4.39bn, an increase of 3.1% compared to 2012. Infrastructure approvals in 2013 amounted to UA 2.05bn (57.6% of total approvals). “It accounted for 39.6% (UA 564.9 million) of bank approvals and 69.7% (UA 1.47bn) of bank approvals. Transport was the dominant subsector followed by energy, and water and sanitation.”
In 2014, the AfDB announced the launch of a new infrastructure fund aimed at supporting “high-impact national and regional projects and to cut the time taken between project ideas and financial close by more than half”. The bank said the ‘Africa50’ fund would attract “non-traditional funders” such as institutional investors and “mobilise private financing to accelerate infrastructure delivery” on the continent.
Earlier this year, the AfDB approved a $50m investment to become an “anchor investor” in a multinational power company with bases in Nigeria and Zambia. The bank said it was backing CEC Africa Investments Limited, which “seeks to acquire and develop distribution and transmission assets and complementary greenfield generation projects throughout sub-Saharan Africa”.
