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Opec Fund agrees $50m loan to support Africa’s infrastructure

An energy worker in Tanzania. The Opec loan will be used to boost access to energy across Africa Reuters
An energy worker in Tanzania. The Opec loan aims to boost access to energy across Africa

The Opec Fund for International Development (Opec Fund) and Africa Finance Corporation have signed a $50 million loan agreement to finance infrastructure development critical to economic growth and job creation across the continent.

The proceeds of the 10-year loan will be used to improve connectivity, transport, logistics and trade, as well as boost access to energy across Africa, reported the state-owned WAM news agency.

The loan doubles the Opec Fund’s commitment to Africa Finance Corporation following a $50 million, 10-year loan provided in January 2021, building on a cooperation agreement in 2017. The loan is aligned with the United Nations’ sustainable development goal 9 – innovation and infrastructure – and goal 17 – partnerships.

“Africa continues to be a key region for the Opec Fund, with more than 45 percent of our aggregate financing dedicated to the continent,” said Opec Fund director-general Dr Abdulhamid Alkhalifa.

“Sustainable infrastructure development is key to unlocking Africa’s vast potential and enabling it to fully utilise its resources. Working with local partners such as AFC helps deepen our impact and support Africa’s development agenda.”

Africa Finance Corporation president and CEO Samaila Zubairu said: “Developed and developing countries alike are battling the chronic challenges brought on by a wave of global shocks, and these challenges will only be solved by working together through partnership and engagement between the world’s leading financial institutions.”

Africa’s economic growth has been slowed by global supply chain disruptions and rising costs in the aftermath of the Covid-19 pandemic, further widening the continent’s infrastructure funding gap.

The collaboration between the Opec Fund and Africa Finance Corporation aims to increase access to long-term sustainable infrastructure finance for infrastructure projects.

The corporation is a multilateral financial institution with 39 member countries, established to provide financing and private sector-driven solutions for infrastructure in key sectors, including power, transport, heavy industries, telecommunications and natural resources.

To date, it has invested over $11 billion in projects across 36 African countries.