ADDIS ABEBA – The African Development Bank said it has made a historic $115 billion capital increase from its shareholders, the largest in the bank’s 55-year history.
Applause rang through the stately auditorium of the Sofitel Abidjan, Hotel Ivoire, around 5.30 in the evening after the decision was announced on Thursday.
The decision caps two years of negotiations to give the Abidjan-based bank greater scope to meet the continent’s funding needs. The last increase was agreed in 2010.
“Today is a day of joy for Africa…because the shareholders of the African Development Bank trust the…Bank and have provided this financing,” Bank President Akinwumi Adesina said.
Adesina said the capital increase showed that the shareholders had “tremendous faith” in Africa and the Bank, according AfDB’s statement issued on.
At the extraordinary shareholders’ meeting held on Thursday, the Bank, representing shareholders from shareholders 54 African nations and 26 non-African donor countries, approved the landmark capital increase. The Bank’s capital base now stands at $208 billion.
Adesina said the shareholders had endorsed the Bank’s climate change strategy.
“We as a Bank had said we are going to double our financing for climate change…so the shareholders strongly supported that direction…They are asking that we do a lot more on climate,” Adesina said.
He also cited the recently launched Desert to Power initiative, which will help supply electricity to 250 million people in 11 countries across the Sahel by tapping into the region’s abundant solar resources.
Speaking what the increase would mean for a continent, Adesina said the Board had also called for more investments in regional integration projects and in fragile states affected by a combination of challenges, including conflict, environment challenges and poverty.
“We’re going to focus on all countries…Countries have development strategies, those strategies inform their requests for loans to us,” Adesina said. “We don’t dictate.”
Despite having some of the world’s fastest growing economies, the continent still has significant challenges, such as a bulging youth population and a large infrastructure gap.
Senior Vice President, Charles Boamah, also said the Bank was not the only player involved in Africa’s development.
“It is very important to also think what is going to come from the private sector…Most of the resources for the development of Africa have to come from the private sector. What we are going to do, is to improve business and investment climate,” Boamah said.
The general capital increase calls for greater efficiencies in operations and delivery in order to meet the high expectations of shareholders, according to the bank’s official.
In Ethiopia, the Bank’s portfolio in Ethiopia comprises 24 operations worth about $1.7 billion, largely in transport, energy, water and sanitation infrastructure, governance and accountability, private sector, and agriculture and food security.
About 32% of the Bank’s operations are in road projects, amounting to $515 million, including four on-going projects covering about 610 km in different parts of the country.