The Eastern and Southern African Trade and Development Bank Group (TDB Group), Japan International Cooperation Agency (JICA), Citibank, and SMBC Group (SMBC) are pleased to announce a EUR 240 million facility agreement aiming to foster and facilitate private sector development initiatives, to improve inclusive economic growth in less developed countries (LDCs).
The signing ceremony took place on February 26th, 2024, at TDB Group’s Operations Hub in Nairobi, Kenya, TDB Tower in the presence of Admassu Tadesse, Group President and Managing Director, TDB Group; Jin Wakabayashi, Deputy Director General, Private Sector Partnership and Finance Department, JICA; Martin Mugambi, Managing Director, CEO Kenya, Citibank; and Hirokazu Okado, Managing Director, International and Structured Finance, SMBC Group.
The line of credit is composed of a long-term project finance tranche from JICA, and a short-term trade finance tranche from SMBC and Citibank, both mandated lead arrangers (MLA) in the transaction.
The facility reflects the institutions’ commitment to enhancing economic growth, encouraging entrepreneurship, and promoting financial inclusion in TDB Group member states.
Among anticipated impacts, the facility is expected to increase access to finance for MSMEs, enabling them to invest in growth, innovation, and job creation. Likewise, it will look to support investments in agribusiness expansion and agricultural innovation through innovative practices and technologies and supply chain improvements. Furthermore, the facility will focus on supporting investments in industrial development including in manufacturing, as well as in infrastructure development to catalyse an enabling business environment.
Through direct lending to private sector, co-financing and on-lending via financial intermediary, the facility is poised to positively impact livelihoods, reducing poverty and creating employment, opportunities including in rural areas, to contribute to improving food security and sustainable food systems, as well as to overall economic growth and stability.
“We are pleased to forge this new strategic partnership with JICA and to expand the fruitful ones we have been building with Citibank and SMBC over the years” commented Admassu Tadesse, TDB Group President and Managing Director. “We look forward to working together to address the unique needs of the African region we serve, fostering cross-border cooperation and leveraging innovative financial solutions, to bolster economic resilience for the private sector and promote inclusive and sustainable growth.”
“This Facility is especially highlighted given the fact that it is JICA’s very first loan extended to TDB which signifies a milestone achievement of a new partnership between the two institutions, with strong collaboration with Citigroup and SMBC” commented Jin Wakabayashi, Deputy Director General, Private Sector Partnership and Finance Department. “We are confident that the facility will be utilized effectively and sufficiently towards a smooth and sustainable recovery from multiple external shocks and vulnerabilities in the African region, under TDB’s extensive experience in this field.”
Martin Mugambi, Citi Kenya CEO said: “At Citi, we are committed to bringing solutions to our clients and this blended finance facility signifies not just an investment, but a commitment to fostering sustainable development and uplifting communities. For over three decades Citi has enabled TDB’s impact across the continent. We are proud to partner as the sole coordinator of the loan that will empower businesses that are dedicated to making a positive impact in their communities, creating pathways to economic stability and self-sufficiency across some of Africa’s least developed countries.”
“SMBC is very proud to have collaborated on this landmark transaction with TDB, JICA and Citibank,” commented Hirokazu Okado, Managing Director of International and Structured Finance, SMBC Group. “This transaction will be instrumental in creating social value and generating economic growth by supporting microfinance and agribusiness activities in TDB’s member countries.”