Partnering and Investing with the African Development Bank

October 2018 1 Overview of the Bank Group

Africa is a continent of contrast, rich in natural resources yet its people are among the poorest in the world. The image of Africa that gets projected in the world is that of a continent with disease, hunger, corruption and the need for aid beyond a foreseeable future. But, there is another story that is less often told that acknowledges the challenges faced by theMiddlecontinent-East but also recognizes the progress made in terms of more children going to school, less war, the growing quest for better governance and an expanding middle class. The African Development Bank is proudly part of that story.

1 Africa’s Premier Development Financial Institution

The AfDB Group: three constituent institutions, separate legally and financially, with a common goal

African Development Bank (ADB) African Development Fund (ADF) Nigeria Trust Fund (NTF)

• Established in 1964 • Concessional financing, established • Established in 1976 by Nigeria • 80 member countries in 1972 • Targeted at the Bank’s needier • Authorized capital: USD 93 billion • Financed by 27 State participants countries • Resources raised from capital markets and 4 regional donors • Maturing in 2023 • 0% Risk Weighting under Basel II • Subscription: USD 41 billion • Total resources: USD 242 million • Level 1 under Basel III • Focus on low income countries • Replenished every 3 years As at 31st December 2017

Board of Governors Board of Directors • Highest decision making body • 20 Executive Directors elected by the Decisions by both Boards require two • Composed of Ministers of Finance and Board of Governors third majority or Ministers of Cooperation of the Bank’s • Oversees the general operations of 70% should any member countries the Bank member require so

2 …focused on combating poverty, and improving living conditions on the continent 50 years of partnership for the development of Africa

Americas G-7 Shareholding: 28% U.S.A. 6.623% Canada 3.876% Europe Brazil 0.332% Germany 4.157% Argentina 0.090% France 3.773% Italy 2.438% U.K. 1.774% Sweden 1.578% Africa Switzerland 1.473% Denmark 1.182% Nigeria 9.332% South Sudan 0.412% Norway 1.181% Egypt 5.622% Guinea 0.403% Spain 1.070% South Africa 5.055% Burkina Faso 0.399% Netherlands 0.879% Algeria 4.243% Namibia 0.345% Belgium 0.642% Côte d'Ivoire 3.738% Sudan 0.309% Finland 0.491% Morocco 3.608% Sierra Leone 0.289% Austria 0.449% Libya 2.652% Malawi 0.244% Portugal 0.240% Ghana 2.140% Burundi 0.238% Luxemboug 0.202% Zimbabwe 1.965% Niger 0.237% Ethiopia 1.580% Benin 0.193% Kenya 1.440% Liberia 0.192% Strong AAA credit strength, Prudent financial & Tunisia 1.406% Togo 0.157% risk management D.R.Congo 1.293% Gambia,The 0.152% capitalization our driving force for Middle-East Zambia 1.177% Equ.Guinea 0.146% policies Angola 1.168% Rwanda 0.132% development Kuwait 0.451% Cameroon 1.082% Swaziland 0.114% Turkey 0.359% Botswana 1.077% Cape Verde 0.070% Saudi Arabia 0.194% Senegal 1.047% Sao Tome & P. 0.068% Gabon 0.997% Chad 0.066% Tanzania 0.762% Lesotho 0.057% Asia Mauritius 0.653% Mauritania 0.057% Madagascar 0.649% Cent.Afr. Rep 0.042% Extraordinary Japan 5.518% Eritrea 0.031% Excellent Preferred Mozambique 0.622% shareholder China 1.183% Congo 0.454% Somalia 0.030% liquidity creditor status Korea 0.483% Uganda 0.450% Seychelles 0.028% support India 0.258% Mali 0.433% Guinea Bissau 0.021%

(As of 31st December 2017) 3 The Bank Group addresses the diverse needs of the continent Preserving the long-term financial integrity of the AfDB

ADB Sovereign Operations Additionality and development 17 middle-income countries eligible outcome assessment-core to receive ADB funding indicators

Criteria : • Job creation . GNI per capita • Government revenues . Country’s creditworthiness • Financial return • Foreign currency earnings

Access to ADB and ADF financing Private Sector Operations & 4 Blend countries with access to both Eligible SOE ADF and ADB resources. (Cameroon, Kenya, Senegal & Zambia) Viable enterprises and multinational projects with an additionality and development outcome

• Direct Loans • Lines of Credits ADF Concessional Financing • Equity Participation 33 Low-income countries are • Guarantees eligible to receive loans and grants from ADF only

4 The High 5s – accelerate Africa's transformation

Delivering on the Bank's Ten Year Strategy to achieve inclusive growth and help Africa gradually transition to green growth

Improve the Priority areas Integrate Light up and Feed Africa Industrialize quality of life for High 5s Power Africa Africa Africa Investment the people of Needs Africa USD 170 bn

3 4 5 7 9 13 2 5 13 5 7 8 9 12 6 9 17 3 4 5 6 8 1011

The High 5s will help Africa achieve close to 90% of the United Nation’s Sustainable Development Goals (SDGs) and are intrinsically linked to the African Union’s Agenda 2063

5 Bold actions to light up and power Africa

Our goal is to expand Africa’s capacity by Results from projects approved during 2012-2016 160 GW by 2025

Over 6 GW additional capacity Create 130 million Provide 150 million on-grid Add 75 million off- households with connections grid connections access to clean cooking energy 6,300 km of transmission lines along with 36,300 km of distribution lines and Energy sector commitments from 2012-2016 associated substations/transformers

1.3 million new electricity connections

USD 2 billion USD 7 billion USD 12 billion mobilized by the invested by the attracted in Bank Bank external ~21 million tons of CO2 avoided per year co-financing

~40,000 jobs created during construction AfDB development impact in 2016 phase and ~9,000 during maintenance phase and 1,700 staff trained

3.3 million Africans benefitted from new electricity connections 6 Creating wealth, improving lives while preserving the environment Agricultural transformation

Our Priorities • Increased productivity and value addition • Greater investment in infrastructure Technical assistance to Farming and local farmers, civil 350 million self- • Expanded agricultural finance Agriculture will society and governments young people to employment to • Improved agribusiness environment not be attractive enter labor force provide gainful • Increased inclusivity, sustainability, and nutrition to provide policy advice to young people by 2035 in sub- employment for and capacity building until earnings in • Enhanced partnerships Saharan Africa at least 70% of the sector and only 25% young Africans increase Our Goals will be entering the substantially • End extreme poverty, hunger and malnutrition employed labor force until Climate smart 2030 • Achieve net export status for agricultural commodities • Eliminate malnourishment for about 240 million agriculture practices people and reduction of • Double Africa’s share of market value select emissions from forest processed agricultural commodities degradation

AfDB development impact in 2016 Food security impact development results (2014–2016)

Expanded access to Over 16 million Extended improved 5.7 million Africans benefitted agricultural land with farmers farming technologies improved access to from improvement to agriculture supported to nearly 2 million water management by through the Bank’s work rural farmers 112,000 hectares 7 Doubling industrial GDP to USD 1.72 trillion by 2025

USD 1.7 billion Foster successful industrial policies: Leverage to be invested Promote strategic partnerships: Launch the Africa balance sheet and strong relationship with annually by the Investment Forum to connect African-based governments to provide funding through technical Bank enterprises with investors assistance, capacity building and advisory projects

Develop efficient industry clusters: Technical Support African Promote and drive enterprise development: assistance on structuring industrial clusters and countries move Lines of credits to SMEs to reach USD 521 million co-financing to scale up the infrastructure up global value annually development chains and create jobs

Expand liquid and effective capital markets: Support 20 financial markets across Africa through Aim to facilitate Catalyze funding in infrastructure and industry technical assistance and advisory services, promote cumulative projects: Boost private sector operations and mobilize market integration, increase guarantee interventions and investments of funding through co-financing and trust funds support introduction of new products and services USD 56 billion by 2025

By supporting the development of the private sector and unlocking potential for SMEs 8 Integrate Africa is an imperative Billions of dollars in potential trade lost because of lack of cross-border production networks

Powering regional  Intra-African trade lowest globally at Our focus integration 15%, compared to 61% in Asia, 60% in the EU and 41% in the North America Free Trade Area  Develop a vision and Tariffs on intra-regional imports • Poor infrastructure road network, strategic framework East African inefficient transport system for the development of 0% regional and Community • Partial implementation of regional continental Economic Community commitments infrastructure of Central African • Capital outflows obstructed by  Create larger, more States & Common 1.9% poorly developed financial markets attractive markets Market for Eastern and • Low labor mobility  Link landlocked Southern Africa • Little economic diversification countries to international markets Southern African  High trade costs with small markets, Development 3.8% scattered and far from major markets  Support intra-African trade Community Economic Community AfDB development impact in 2016  Address Africa’s low 5.7% internal and external of West African States trade performances

7 million Africans benefitted from improved access to transport through the Bank’s work NEPAD-IPPF (Infrastructure Project Preparation Facility): 72 grants approved since 2005 for complex, cross-border regional infrastructure projects resulting in downstream financing of USD 7.88 billion 9 Unlocking human capital, an opportunity for prosperity

Potential engines of Our objectives Jobs for Youth in Africa over 2016-2025 productivity Harnessing Africa’s demographic dividend to AfDB financing: USD 4.8 billion drive robust and inclusive economic growth • The world's youngest • Create 25 million jobs by 2025 population with 420 million aged between • Impact 50 million young people by 15 and 35 strengthening human capital, creating durable labor market linkages and creating Develop Promote equal • 36 out of the world's Create jobs entrepreneurship opportunities better opportunities 40 youngest countries are in Africa • Support policies and institutions in African countries • Implement flagship programs in agriculture, ICT and industry to strengthen AfDB development impact in 2016 skills and stimulate entrepreneurship • Generate USD 30 billion in income gains for African economies . 480,000 young Africans benefitted from better access to education . 3.7 million people got improved access to water and sanitation . 9.3 million people got better health care services . 1.6 million jobs created across all sectors, financing windows and High 5s 10 Resilience to negative shocks

Real Output is up Foreign Direct Investments In USD billion 4.1% . Better macroeconomic management 59 . Progress in structural reforms 4.1% 57 . Sensible policy frameworks 2019 55 53 3.6% 2018 51 49

2017 47 Stronger economic 45 Good GDP perspectives 2010 2011 2012 2013 2014 2015 2016 Source: African Economic Outlook 2018 growth . Recovery in commodity prices recovery from . Sustained domestic demand 2.2% in 2016 . Improvement in agricultural production Extractive industries, infrastructure, and consumer- oriented industries

11 Some private sector projects

Kenya - Lake Turkana Wind Power Project Rwanda - Kigali Bulk Water Supply Project

“African Renewable Project cost: EUR 625 million Deal of the Year 2015” Project cost: USD 79.1 million AfDB Financing: EUR 115 million award by Thomson AfDB Financing: USD 20 million Reuters Project Project Description: Project Description: Finance International . Construction of 300 MW wind farm, comprising of 365 . Design, build, operate and maintain a 40,000m3/day Bulk Water turbines of 850 KW capacity, connected to the power grid Facility, south of Kigali Expected outcomes: Expected outcomes: . Scale up energy generation to 5,000 MW . Provide clean potable water and improving public health . Produce 20% of Kenya’s currently installed capacity, . One of the first large-scale water supply PPP in Sub-Saharan closing the energy gap of the country “Best deal of the Year Africa . GHG emissions reduction of 700,000 tons of CO2 per in Africa 2017” award year by Euromoney Award Mali - Segou Solar Photovoltaic Power Plant Project Multinational - Nacala Rail and Port Project Project cost: EUR 49 million AfDB financing: EUR 8 million Project cost: USD 4,597 million Computer generated mockup of the Lake Turkana project AfDB Financing: USD 300 million Project Description: . Design, construction and operations of the first large-scale Project Description: solar photovoltaic plant in Mali . Support the construction/rehabilitation of railway and Expected outcomes: associated port infrastructure from Mozambique to Malawi . Expected to add 33 MW to the installed power generation Expected outcomes: capacity of about 528 MW . Creation of 1,500 jobs during construction . 55,000 equivalent tons of CO2 avoided each year . Facilitate trade and development across the region . Produce enough power for approximately 60,000 . CO2 emission reduction households 12 Africa’s premier investment market place

AfDB estimates investment needs for A totally transactional opportunity for investors infrastructure in the range of USD 130–170 billion a year . Bringing together AfDB and global multilateral financial institutions to de-risk investments at scale . Leverage investments strategically in Africa . Catalyze investments into projects to help the High 5s agenda November 7-9, 2018 . Scaling up project preparation facilities and tools Johannesburg, South Africa . Addressing policy and regulatory issues . Promoting projects for co-investments and blended finance • Private sector: banks, insurance . Providing effective risk-mitigation instruments (creation of a co- companies, private equity and venture guarantee platform) capital firms, impact investors, pension funds, project developers • Government officials: Heads of State Targeted investors and Government, Ministers of Discussions to focus on Finance, Central Bank Governors, Sovereign Wealth Funds  Global pension funds  Develop and structure deals • Multilateral development finance  Sovereign Wealth Funds  Promote deals institutions  Institutional investors  Close deals and execute deals

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African Development Bank, your financing partner

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Deep understanding of the Significant footprint and

Preferred Creditor Status challenges of the continent extensive experience

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Better positioned to address risk allocation among both the Borrower Closer to clients and the Foreign Sponsor / Investor

14 For more information

www.afdb.org

Contact: [email protected]

African (225) 20 26 39 00 afdb_acc Development AfDB_Group (225) 20 26 29 06 Bank Group

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