Private sector investment in Benin, Burkina Faso, Chad and Senegal to accelerate following EIB insurance support
Agreements for EUR 60 million from EIB will enable the four countries to either become full members or increase their current participation in ATI before the year ends
Initiative to leverage around EUR 1 billion private sector investment in Western and Central African states
Team Europe-Africa cooperation supporting economic resilience to COVID-19
FRI, 30 OCT, 2020-theGBJournal- The agreements for EUR 60 million from European Investment Bank (EIB) will enable the four West and Central African countries of Benin, Burkina Faso, Chad and Senegal to either become full members or increase their current participation in ATI before the year ends. This is expected to leverage an estimated EUR 1 billion of new private sector investment.
The latest EIB support for transformational investment were agreed during a virtual signature ceremony attended by Toavina Ramamonjiarisoa, Acting Chief Executive Officer of ATI and Maria Shaw-Barragan, Director for EIB operations in Africa, the Caribbean and the Pacific.
Ramamonjiarisoa said Business activity across West Africa will be transformed following this key agreement between ATI and the European Investment Bank.
‘’By joining ATI, Burkina, Chad and Senegal will be able to accelerate crucial investment and better cope with the pandemic. Benin, who has been a member since 2012, will further benefit from ATI’s products, through its new capital increase. Private sector investment in Benin, Burkina Faso, Chad and Senegal, will be strengthened following European Investment Bank support for the countries in their membership and share capital increase in the African Trade Insurance Agency (ATI),’’ he added.
Burkina, Chad and Senegal will join 18 African countries including Benin, who is already a member, where business investment, job creation and access to finance has been increased by targeted investment insurance. As seen elsewhere across Africa, ATI membership will help to address the economic, social and health challenges caused by COVID-19.
Ramamonjiarisoa noted that over the last twenty years, ATI has supported more than USD$62 billion of investments and trade across Africa.
‘’With ATI’s innovative solutions, member states have been able to attract competitively priced and longer-term financing owing to strong credit ratings, S&P ‘A’ and Moody’s ‘A3’, and ability to mobilize highly-rated reinsurance capacity.’’
Ambroise Fayolle, European Investment Bank Vice President believes the agreements will facilitate and expand private sector and clean energy investment across West Africa and the Sahel.
‘’Improved insurance will create jobs and help business and entrepreneurs to better address challenges caused by COVID-19.
New EIB support for private sector investment in West Africa follows recent backing of large scale solar energy and fifty years of engagement across Africa.
According to Fayolle, ‘’the EUR 60 million EIB support, in addition to the EUR 34 million rolled out last year to support Cameroon, Niger and Togo’s memberships demonstrates Team Europe’s rapid response to enhance cooperation with African partners during challenging times.’’
Becoming a full member country will make it easier and cheaper for investors to create jobs, expand business activity and provide clean energy in all these countries.
Elsewhere in Africa, membership of ATI has enabled countries to reduce debt levels and provide global investors and financiers with comfort that sovereign transactions and other investments are back-stopped by a highly rated and reputable insurance guarantee provider.
The lack of investment insurance in most African markets is holding back vital investments, both in equity or debt, and hampers cross border trade. In recent months, increased economic challenges linked to the COVID-19 pandemic has compounded the shortage of trade insurance in Africa. ATI’s presence is therefore now, more than ever, a key component of many countries’ ability to remain attractive investment destinations.
As African countries begin to build buffers against the likely negative economic fall out from COVID-19, investment insurance capacity is seen as a critical part of the financial support that will be needed to better protect the economies of many African countries.
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