Japan steps up African investment with development fund boost

Out-Law News | 28 Feb 2018 | 4:43 pm | 1 min. read

The Japan International Cooperation Agency (JICA) has approved its first official development assistance loan to the African Development Fund, to support loans for infrastructure and development projects across Africa.

The fund, part of the African Development Bank (AfDB) group, mainly provides support to least-developed and poor countries in the form of very long-term, low-interest financing.

In addition, the AfDB said JICA had awarded a grant of $328m to the fund.

The loan is part of Japan’s contribution to the fund’s 14th replenishment – providing financial backing to support countries through to the end of 2019.

Japan’s ambassador to Cote d’Ivoire, Hiroshi Kawamura, said the loan replenishment marked an increase in contributions from his country to the fund from 6.7% to 7.3% since the last replenishment round.

JICA’s chief representative in Cote d’Ivoire, Tsutomu Iimura, said “there is no limit in the potential collaboration and synergies between the two institutions”.

The fund, launched in 1972, receives subscriptions in the form of grants from donor countries.

AfDB president Akinwumi Adesina said Japan is currently the second-largest contributor to the fund in cumulative terms “and has increased its contributions significantly over time”.

Japan is among key international investors in Africa. At the sixth Tokyo International Conference on African Development (TICAD) in 2016, Japan pledged $30 billion public and private support for Africa over the next three years to boost infrastructure development in the continent.

Japan regards TICAD, initiated in 1993, as “one of the most important and most visible features” of its relationship with Africa, according to the country’s foreign ministry.

Last year, the government of Japan and the AfDB signed a letter of intent to launch the Japan-Africa Energy Initiative – promoting investments “to achieve universal access to energy by 2025 using available energy sources and the most advanced technologies”.

Earlier this month, a consortium of investors from Japan reportedly expressed interest in setting up industries in Zambia for mining of rare-earth – a key component in making electronics such as mobile phones, and cameras.