Partnership between Agence Française de Développement and Afreximbank to support the fight against the Covid-19 pandemic

Categories: Press Releases

As part of the EU-AU Summit held in Brussels from 17 to 18 February, Rémy Rioux, Director General of AFD, and Professor Benedict Oramah, President of Afreximbank, sealed a strategic partnership between AFD and Afreximbank.

A first 50 M€ financing agreement for the support to vaccination against Covid-19 on the African continent through African vaccine Acquisition Trust (AVAT) has been signed between AFD and Afreximbank. The objective is to jointly promote a socially inclusive and resilient economic trajectory to the effects of the Covid-19 pandemic for the continent. A further €100M  is being assessed for approval in 2022.

The facility aims to help protect African populations against the health and socio-economic effects of the Covid-19 pandemic.

  • The project will support the AVAT initiative in its efforts to ensure easy, expedited, and affordable access to Covid-19 vaccines;
  •  It will also support the Bank in developing innovative financial instruments for crisis response as part of an African initiative.

This facility allows for the financing of programs supported by the African Union (AU) and the African Center for Disease Control (Africa CDC), which have launched the African Vaccine Acquisition Trust (AVAT) Initiative. This mechanism allows African countries to pool their vaccine orders and benefit from access to safe vaccines at negotiated prices. This initiative will contribute to achieving the African Union’s goal of vaccinating 70% of the continent’s population.

“AFD is proud to strengthen its partnership with Afreximbank, a leading player in African finance, in support of an inclusive economic and social transition. This new €50 million facility, appraised in parallel with support provided by other European donors including KFW and the EIB, will meet the demands of African countries for a joint investment to strengthen their political and economic sovereignty. This financing, which aims to support sovereign group purchasing mechanisms and the production of health products on the African continent, will provide concrete support to the African Union (AU) and the African Center for Disease Control (Africa CDC) for the benefit of the entire population of the continent. The cumulative commitment of Team Europe will be €550 million,” said AFD Director General.

Professor Benedict Oramah, President of Afreximbank, commented: As part of the AVAT initiative, Afreximbank has put in place a unique financial structure including a purchase guarantee to COVID-19 vaccine manufacturers and an installment payment plan designed to ensure equitable access to COVID-19 vaccines for African states. As a result of these efforts, we have secured several hundred million doses of vaccine, which AVAT began rolling out in Q3 2021. But there is still a long way to go to reach the goal set by the African Union of vaccinating at least 70% of the African population. We believe that it is also through international cooperation that we will achieve this. This is why we value this 50-million-euro facility from AFD which will support our ongoing efforts to address the challenges of COVID-19 vaccination in Africa. This new collaboration between Afreximbank and AFD marks another step in the fruitful partnership between our two institutions.”

AFD Group and Afreximbank: a sustainable partnership

In September 2015, AFD signed an initial EUR100 million loan agreement with Afreximbank to finance investment projects that contribute to the development and enhancement of African trade. In 2018, AFD and Afreximbank strengthened their long-term partnership to support Afreximbank’s activities in promoting intra- and extra-African trade as well as Afreximbank’s transition to financing a low-carbon and climate-resilient African economy. An MoU was signed in October 2018 to enhance this collaboration with the benchmark “All Africa” actor, which is broken down as follows:

  • A EUR 200 million facility to support investments that contribute to the growth and development of intra- and extra-African trade;
  • A EUR 150 million “pro-climate” line of credit to support Afreximbank’s transformation towards a more climate-friendly strategy, organization and operations;
  • Technical assistance financed by a EUR 0.5 million grant (signed in June 2018) to support Afreximbank in this internal transition to climate finance;

On December 9, 2021, AFD and Afreximbank signed a Letter of Intent Framework Agreement for a total of €150 million, including the €50 million AVAT facility on the one hand and a second loan of up to €100 million for sustainable and inclusive finance on the other, which will be appraised in 2022.