OPEC Fund injects USD20m into EADB for on-lending to SMEs
The OPEC Fund for International Development OPEC Fund, on Monday, approved a USD20 million term loan to the East African Development Bank EADB. The loan will reinforce EADB’s lending to small and medium-size enterprises SMEs, and infrastructure projects in East Africa.
EADB has ramped up its resource mobilization activities to meet the growing financing needs of SMEs. Owned by Kenya, Uganda, Tanzania, Rwanda and a diverse shareholder base that includes multilateral and bilateral development institutions and international financial institutions, EADB is an important regional development institution that supports private sector led development initiatives across the East Africa region. Ugandan poultry breeder Ugachic is one example of SME’s that has in the past leveraged EADB funding to expand their operations.
“We are very pleased to support private sector development in East Africa, which goes to the core of our mandate,” said OPEC Fund Director-General Dr Abdulhamid Alkhalifa.
“SMEs are critical to achieving progress toward Sustainable Development Goal SDG-8 on decent work and economic growth. Efficient infrastructure, as part of SDG 9, improves access to social services, reduces business and production costs, supports trade, and will ultimately provide East Africa with a more competitive business environment,” he added.
SMEs account for more than half of EADB’s portfolio. The bank is expanding its resource mobilization activities to meet the growing financing needs of SMEs which play an important role in development, driving economic growth and employment opportunities in East Africa and in developing countries generally.
This is the third loan the OPEC Fund has extended to the Kampala headquartered bank, in support of SMEs and brings the Fund’s disbursements over the years, to a total of USD 45 million. The Fund first lent USD10 million in 2001, followed by a further USD15 million in 2013.
“The SME sector is a critical pillar for sustainable economic growth as it is the backbone of the EADB member countries’ economies. We are pleased to receive a line of credit of USD20 million from the OPEC Fund dedicated to financing SMEs and infrastructure projects in EADB member countries and appreciate the confidence placed in the EADB by the OPEC Fund. By financing SMEs, we expect to promote enterprises that generate employment opportunities, social economic development and consequently promote regional integration,” said EADB Director General Vivienne Yeda Apopo.