African Development Bank and Japan International Cooperation Agency Sign $5.5 Billion Agreement for Enhanced Private Sector Assistance Initiative

Strategic Insights -

The African Development Bank and the Japan International Cooperation Agency (JICA) have signed a Memorandum of Understanding for the sixth phase of the Enhanced Private Sector Assistance (EPSA6) initiative, which aims to mobilize critical resources and development partnerships for African countries. The agreement, signed during the Ninth Tokyo International Conference on African Development (TICAD9) in Yokohama, Japan, sets a joint financing target of up to $5.5 billion for the period 2026-2028, doubling the target of the previous phase. The EPSA initiative supports the implementation of the Bank's Strategy for Private Sector Development, with key priorities including power, connectivity, health, agriculture, and nutrition.

Key Takeaways:

  • The African Development Bank and JICA have signed a Memorandum of Understanding for the sixth phase of the Enhanced Private Sector Assistance (EPSA6) initiative, with a joint financing target of up to $5.5 billion for the period 2026-2028.
  • The EPSA initiative was created in partnership with the Government of Japan and the Bank in 2005 to support the implementation of the Bank's Strategy for Private Sector Development, with key priorities including power, connectivity, health, agriculture, and nutrition.
  • The partnership between the African Development Bank and JICA has resulted in $12 billion of joint support to Africa since 2005, with $5.5 billion of the current target being more than five times the original target of EPSA1, 20 years ago.
  • The new priority under EPSA6 is resilience, which aims to address climate change and a broad range of shocks, including debt burden.
  • The EPSA non-sovereign operations component helps finance the Bank's private sector operations through a line of credit from JICA to the Bank on concessional terms.
  • The partnership between the African Development Bank, JICA, and the Government of Japan has financed critical infrastructure projects such as the Bujagali Hydropower Plant, RASCOM, the East Africa Submarine Cable System, Lekki Toll road, and the Kigali Bulk Water Supply.

Statistics:

  • $5.5 billion: The joint financing target for EPSA6
  • $12 billion: The total joint support to Africa under EPSA since 2005
  • 5 times: The increase in the financing target for EPSA6 compared to the original target of EPSA1
  • 20 years: The time since the start of the EPSA initiative
  • 2026-2028: The period covered by the EPSA6 agreement
  • 2005: The year the EPSA initiative was created
  • $5 billion: The financial cooperation announced for EPSA5
  • $4 billion: The joint cofinancing target achieved by EPSA5 as of the current date
  • $1.6 billion: The value of projects worth at an advanced stage of co-financing by the end of 2025 under EPSA5

Sources:

  • African Development Bank. (2023). TICAD9: Japan International Cooperation Agency and African Development Bank sign agreement to extend Enhanced Private Sector Assistance initiative for $5.5 billion.
  • [No date]. Tokyo International Conference on African Development (TICAD9) Background Notes.