4 September 2009
The International Finance Corporation, a member of the World Bank Group, is to provide US$150-million (about R1.15-billion) to South Africa’s Absa Bank to provide funding for infrastructure projects in sub-Saharan Africa.
The IFC’s financing will consist of a $30-million loan and $120-million standby credit facility, which Absa will use to finance projects that will promote economic development in some of the poorest countries in sub-Saharan Africa.
The IFC’s investment would enable Absa to continue lending to commercially viable African infrastructure projects “that have stalled amid the sharp decline in hard currency financing following the global financial crisis,” Absa Group CEO Maria Ramos said in a statement this week.
Global crisis response
The financing is part of the IFC’s response to alleviating the impact of the global financial crisis on private sector development. The corporation is providing similar financing to other financial institutions to help ensure that viable, privately funded infrastructure projects across Africa have access to funding to weather the financial crisis.
“Good infrastructure, including roads, ports, and transmission lines, is central to enabling trade, promoting competitiveness, and fostering a vibrant private sector,” said IFC sub-Saharan Africa vice-president Thierry Tanoh.
“[The] IFC is committed to working with partners such as Absa to develop infrastructure across Africa and help alleviate the impact of the global financial crisis on Africa’s poorest people and regions.”
Infrastructure crisis facility
The IFC also is raising funds for a complementary Infrastructure Crisis Facility, which will provide loans, equity, and advisory services to stabilise existing infrastructure projects facing temporary liquidity problems due to limited private participation.
The lender expects to raise more than $10-billion for the facility to help bridge the gap in available financing for viable, privately funded or public-private-partnership infrastructure projects in emerging markets, including Africa.
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