The African Development Bank (AfDB) and the Government of Japan on Thursday, 11 September 2008 in Tunis, signed a bilateral Exchange of Notes for a loan to the AfDB of JPY 32.1 billion, equivalent to USD 300 million.

The "Second Enhanced Private Sector Assistance (EPSA) initiative Africa" loan is intended to help finance the AfDB's private sector operations. The loan is on concessional terms and carries an interest rate of 0.55% and is repayable over 40 years, including 10 years grace period.

The Exchange of Notes was signed by AfDB President, Donald Kaberuka and the Japanese Ambassador in Tunisia, Shigeru Endo.

Immediately following the signature of the Exchange of Notes, the Loan Agreement between the AfDB and the Japan Bank for International Cooperation (JBIC) was signed by Thierry de Longuemar, AfDB Vice President, Finance and Akihiko Koenuma, JBIC Chief Representative in Paris.

Commenting on the event, President Kaberuka noted that the second EPSA loan brought Japan's total financial support through the Bank under the EPSA Initiative to about US$ 590 million, more than half of the US$1 billion pledged for EPSA by the Japanese Government at the Gleneagles Summit in 2005.  "We can therefore affirm that the EPSA Initiative is well on track to achieving its targets and stated objectives," he said.

Mr. Kaberuka reiterated the Bank's gratitude for the generous support extended to Africa by the Japanese government through the institution.

"We take seriously the burden of responsibility placed on our shoulders by this vote of confidence in us from the Japanese people and their government. I remind Bank staff and colleagues of the seriousness and urgency of the tasks before us – Africa cannot wait, we must hurry. At the same time we must remain diligent and vigilant in fulfilling our fiduciary responsibilities as intermediaries entrusted with the precious resources of the Japanese taxpayer," he emphasized.

For his part, Ambassador Shigeru, narrated the evolution of relations between the two sides, noting that the Government of Japan held the view that in addition to the establishment of region-wide infrastructure such as roads and railways, it was essential to support private sector activities for the development of Africa.

"We strongly hope that together with EPSA I, the EPSA II will further promote private sector investment in Africa. We remain convinced that our support to non-sovereign projects will continue to be a driving force to enhance the private sector activities," he said.

The ceremony was attended by the AfDB Executive Director for Japan, Tetsuya Utamura, Private Sector Department Director, Tim Turner, Treasury Director, Pierre Van Peteghem and Cooperation Unit Chief, Kazumi Ikeda-Larhed.