The African Development Bank and the Botswana Development Corporation (BDC) on Friday signed a Line of Credit (LOC) totaling $80 million to help scale up key investments in the southern African country.
BDC will on-lend to specific target groups, focusing on industrialization including manufacturing, transport and service sectors that have significant development impact.
Repayment will be over 10 years, including a two-year grace period.
Signing on behalf of the Bank, Mohamed Kalif, Manager, Financial Intermediation and Inclusion Division, said: "The African Development Bank is excited to collaborate with BDC to promote private sector development, as well as support broad-based economic growth in Botswana."
Kalif noted that the facility is the largest to be extended to a financial institution in Botswana and that the Bank is very proud of its partnership with BDC, the country's main development finance agency. The institution is also one of the largest investors and a key promoter of the country's industrialization agenda.
This support will contribute immensely to BDC's efforts to broaden access to credit for transformative sectors in Botswana, thereby contributing to building resilience and diversifying the Botswanan economy. The loan "will contribute positively to growing the manufacturing sectors as well as reduce funding constraints on local enterprises," Kalif added.
The facility will also be used to promote private sector development and to foster broad-based economic growth through job creation, increased productivity and to enhance household incomes. It will complement the government of Botswana's efforts to diversify, expand and transform the economy and support value chain projects that enhance regional economic activities.
The BDC, wholly owned by the state, was established in 1970 as a limited liability company. Its goal is to promote and facilitate the development of industrial, commercial, and agricultural enterprises in line with the government's plan for economic development.
The company is mandated to invest locally and outside of Botswana, linking local businesses with intra-Africa enterprises. It is a key player in the development of industrial parks and warehousing facilities to support industries and logistics enterprises.
The intervention by the Bank is well aligned with its flagship High Five priorities, in particular "Industrialize Africa", and "Improve the quality of life for the people of Africa", as well as the Bank's Ten-year Strategy, which aims to assist African countries to attain inclusive growth and gradually transition to green growth.
Contact:
Kwasi Kpodo, Communication and External Relations Department, African Development Bank
Technical Contact:
Mkola Tambwe, Principal Investment Officer.
