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Eligibility: To be eligible for Bank assistance, an enterprise must be located and incorporated in a regional member country of the Bank and be majority owned by private sector interests. Funding can be extended for start-up companies, expansions, or modernizations. The investment must bring benefits to the host country (technology transfer, employment creation, export earning, etc.) and be consistent with the country's economic development objectives. Projects must be financially viable with the potential for an adequate rate of return on capital invested. All projects must comply with the Bank Group's Environmental Assessment Guidelines and the prevailing environmental regulations of the host country.
Types of Projects Funded: The Bank will finance projects in various sectors including energy, manufacturing, transportation, infrastructure, extractive industries, banking and finance, tourism and other service industries. The Bank does not participate in real estate development projects or provide direct trade or housing finance to enterprises. Export- oriented enterprises that use local raw materials are given preference. For a more detailed description of the Bank's criteria, see:
http://www.afdb.org/opportunities/private_sector_window.htm?n1=7&n2=0&n3=0#4
Financial Instruments:
Loans: The Bank offers term loans denominated in a variety of major and local currencies. Interest rates are set to reflect market rates. Bank loans generally run for terms of 5 to 12 years with suitable grace periods reflecting the implementation schedule and projected cash flow of the borrower.
Equity and Quasi-Equity: Bank equity investments may take a variety of forms, including common shares and preferred stock, with or without participation features. In most instances equity instruments are denominated in local currency. The Bank will divest its shareholdings at a fair price once the objective of the Bank investment is considered achieved.
The Bank also offers a variety of Loan Guarantee, Syndication, and Underwriting products. The Bank can assist companies in mobilizing domestic and external financing from other multilateral and bilateral agencies and private financial institutions. The AfDB also extends lines of credit to public and private sector financial institutions in regional member countries for on-lending to SMEs and other corporate clients.
More information on the Bank's financial products and the types of projects funded is available in the AfDB's Guide to the Private Sector Window.
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