The OPEC Fund for International Development said on Monday it had signed a US$20-million term loan in favour of the East African Development Bank (EADB) to support small- and medium-sized enterprises and infrastructure projects in the region.
In a statement the OPEC Fund, an intergovernmental development finance institution established by member states of the Organization of the Petroleum Exporting Countries (OPEC), said this was the third loan it had provided to the EADB in support of such businesses.
“We are very pleased to support private sector development in East Africa, which goes to the core of our mandate,” OPEC Fund director-general Dr Abdulhamid Alkhalifa said.
"We have partnered with EADB since 2001 and we appreciate the opportunity to strengthen our relationship."
In 2001, the OPEC Fund approved US$10-million to the EADB, followed by a further US$15-million in 2013.
Alkhalifa said small and medium enterprises were critical to achieving progress toward the United Nations sustainable development goals on decent work and economic growth.
Efficient infrastructure, he added, improved access to social services, reduced business and production costs, supported trade and would ultimately provide East Africa with a more competitive business environment.
Small and medium sized enterprises account for more than half of the East African Development Bank’s portfolio.
“By financing SMEs, we expect to promote enterprises that generate employment opportunities, social economic development and consequently promote regional integration,” EADB director general Vivienne Yeda said.
“The SME sector is a critical pillar for sustainable economic growth as it is the backbone of the EADB member countries’ economies.”
Shareholders of the bank include Kenya, Uganda, Tanzania and Rwanda as well as multilateral development institutions and commercial banks.
The OPEC Fund works in cooperation with developing country partners and the international donor community to stimulate economic growth and alleviate poverty in all disadvantaged regions of the world.
It provides financing to build essential infrastructure, strengthen social services and promote productivity, competitiveness and trade and focuses on projects that meet basic needs – such as food, energy, infrastructure, employment, clean water and sanitation, healthcare and education.