The African Export-Import Bank (Afreximbank) and the European Investment Bank (EIB) on Thursday entered into a line of credit agreement amounting to €100 million.
The credit line was granted by EIB to Afreximbank on the sidelines of the African Union-European Union summit in Abidjan.
According to a statement on thursday, the facility was aimed at financing trade-related long-term productive investments by private sector entities or commercially operated public sector entities in Afreximbank member countries that are also signatories of the Cotonou Agreement.
The seven-year loan would finance trade-related investments and projects in Africa, with particular emphasis on small and medium-sized enterprises (SMEs) engaged in export manufacturing.
It is expected to enhance intra-African trade, Africa's value-added exports, as well as trade with the European Union, thereby strengthening trade as a key driver of economic growth and competitiveness.
"The facility agreement will add strong impetus to our drive for expanded intra-African trade and for the promotion of industrialisation and export manufacturing across Africa," the President of Afreximbank, Dr. Benedict Oramah said.
He added: "We are delighted that the European Investment Bank has chosen to partner with us in the pursuit of Africa's trade development and we are confident that, with the facility, we can look forward to mutually beneficial development outcomes for our two institutions and to the further strengthening of the relationship between Africa and Europe."
Oramah said the purpose of the facility was fully aligned with Afreximbank's current strategy which prioritised intra-African trade, intra-African investments and export manufacturing, expressing the view that it would contribute to employment creation, increased economic activities, and increase in tax revenues for fiscally constrained governments, amongst other outcomes.
"Afreximbank was aggressively pushing the goal of facilitating the de-commoditisation of Africa as a critical factor in dealing with the migration challenges arising from the ever-expanding youth bulge in the continent," he added.
Speaking during the signing ceremony, EIB's Vice-President responsible for Development, Ambroise Fayolle said the agreement would help develop EU-African trade relations and, crucially, provide much-needed jobs across the continent.