At a recent meeting in Tunis, which discussed potential investment and development collaborations on the continent, the European Bank for Reconstruction and Development (EBRD) and African Development Bank (AfDB) revealed plans to enable the discovery of untapped investment and development opportunities in Africa.
Already, the EBRD, which works as a private investment bank, has started operations in Tunisia, Morocco and Egypt (Northern Africa) to annex the business climates on the continent and tap from the investment/development needs that sprang up from the Arab Spring.
Speaking on the side-lines of the meeting, EBRD Secretary-General, Enzo Quattrociocche said: “What is emerging from this meeting is that there is large room for complementary efforts for the two institutions. Though EBRD business model is more focused on the development of the private sector, while AfDB does something a bit different; there are complementarities in the way we work, and we are exploring these possibilities.”
He added that ERDB already have a track record of co-operation with AfDB in terms of the exchange of information and know-how.
“We have a Memorandum of Understanding with the bank and we are planning to do projects together. We have invested together with TunInvest, which is a private equity investment fund, and there are more opportunities going forward,” he said.
The ERDB Secretary General noted that the reason for starting its investment operations from the Northern part of the continent was as a result of the challenges, needs and opportunities, which rose from the Arab Spring, coupled with shareholders and the international community’s demand.
According to Quattrociocche “After the Arab Spring, our shareholders and the international community at large asked us to start operations in these countries, because we have accumulated 20 years of expertise in Central and Eastern Europe and because our business model is very suited to address the needs of these countries.”
“This was not our region at all, but the Arab Spring was such a huge event that it warranted action mainly in terms of its business model. Because in terms of funding, there are other institutions – the African Development Bank, the World Bank, the European Investment Bank, that are already working in those countries.
The Secretary General however said that one his board major concerns and issues in the Northern African nation is the youth and employment.
“The first things that are needed are well-functioning financial sector and support for SMEs to bring them into the formal sector. Our board has already approved projects in one of the countries, whereby we extend a line of credit to a local bank and, as one of the conditionalities, the bank, while lending to SMEs, has committed to holding training sessions for the end beneficiaries. The one-day-training will focus on the basic financial skills- how to draft a business plan, credit skills and these things. We try to have an impact by way of added value. It’s not only finance. We have to make sure that the beneficiaries are able to make the most of these finances,” he added.
Also present at the meeting was the AfDB President, Donald Kaberuka, who declared the meeting opened, and the Dean of the bank’s Board of Directors, Mohamed Mahroug who chaired the full-day session.