Nairobi/ Montreal, 9 November 2021 – FinDev Canada has announced a 8-year USD 20 million loan to the Eastern and Southern African Trade and Development Bank (TDB), a multilateral development bank that plays a key role in financing and fostering trade, regional economic integration, and sustainable development in Eastern and Southern Africa and beyond.
The funding will help to support inter- and intra-regional trade in the region that TDB serves, strengthen micro, small and medium-sized enterprises (MSMEs), and help finance climate change adaptation and mitigation initiatives aiming to enhance energy security and access to clean electricity, job creation, and reduced greenhouse gas (GHG) emissions – in line with the Paris Agreement, SDGs and Agenda 2063.
This Facility builds on a memorandum of understanding (MoU) signed in 2019 whereby both parties had committed to collaborate on bolstering sustainable economic growth in the region served by TDB, via various avenues, including through trade and project finance.
“TDB has demonstrated its willingness and ability to be there for its clients, supporting their ambitions to grow and create a more integrated, equitable, and economically resilient Africa,” said Paulo Martelli, Chief Investment Officer of FinDev Canada. “This loan represents our belief in that future for Africa, and our commitment to offer financial support to the private sector in several of the continent’s lower income countries. Hit hard by COVID-19, these countries are looking for support to increase trade and reinforce their infrastructure and renewable energy project financing more than ever. This loan will help them do that.”
Admassu Tadesse, TDB President Emeritus and Group MD, said “With the signing of this Facility, we are pleased to commence our practical cooperation with FinDev Canada. It comes at a time when global awareness around shared risks pertaining to health, social inequity and climate change is hightenend and practical commitment and more financing is being called for.”
Abraham Byanyima, TDB Treasury Executive, added that: “This Facility will enable TDB to catalyze further impact-driven capital into our region. Hand-in-hand with FinDev, we can look forward to advancing local economic development, gender action, as well as climate mitigation and adaptation imperatives in our region through our trade and project finance windows.”
There is an estimated USD 331 billion financing gap for MSMEs in Sub-Saharan Africa, including a USD 50 billion gap for women entrepreneurs. In an effort to narrow that gap, TDB provides financing to MSMEs in the region via dedicated programs such as its TDB SME Off-Grid Facility, support to local financial institutions having MSMEs as their client-base, as well as the Trade and Development Fund, TDB Group’s concessional and grant window, which among other activities, supports financially-underserved MSMEs, including those of women and youth.
Likewise, while Africa contributes to less than 4% of global carbon dioxide emissions, it is the continent most impacted by climate change. On that front, with the support of lines of credit earmarked for climate finance, TDB is active financing low-carbon energy projects, with 80% of its energy portfolio currently dedicated to renewable energy projects.
About FinDev Canada
The Development Finance Institute Canada (DFIC) Inc., operating under the FinDev Canada brand, is a Canadian institution dedicated to providing financial services to the private sector in developing countries with the aim of combating poverty through economic growth by focusing on three main topics: economic development through job creation, women’s economic empowerment, and climate change mitigation. The Development Finance Institute Canada Inc. is a wholly owned subsidiary of Export Development Canada (EDC).
Development Finance Institutions and COVID-19
FinDev Canada has a mandate to support companies that have a presence in the areas most affected by the COVID-19 pandemic. Investments will help guarantee that developing markets continue to have liquidity, providing important support for the recovery of the economic and social consequences of this crisis.
Established in 1985, the Eastern and Southern African Trade and Development Bank (TDB) is a multilateral, treaty-based, investment-grade development finance institution, with 41 sovereign and institutional shareholders and assets of USD 7.2 bn. TDB serves 22 economies in its region, with the mandate to finance and foster trade, regional economic integration, and sustainable development.
TDB is part of the TDB Group, which also comprises TDF (the Trade and Development Fund), ESATF (the Eastern and Southern African Trade Fund), TCI (TDB Captive Insurance), and the TDB Academy.
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