JBIC
Strategy
The Medium Term Strategy for Overseas Economic Operation lists “A foundation for sustained growth” as one of the priority area of JBIC operation. This concept primary focuses on the importance of the role of private sector in the economic development and within that context, stresses the need to support economic and social infrastructure. In addition to construction of infrastructure facilities, JBIC recognizes the importance of policy and institutional aspects of infrastructure and tries to addresses them within the scope of yen-loan financed projects.
The above strategy fits well in the African context where the infrastructure gap is huge, but given the fact that most of those countries have benefited from the debt reduction, JBIC thoroughly examines the borrowing country’s debt repayment capacity as well as governance before extending the new loan. This exercise leads JBIC to be selective and strategic in approaching infrastructure assistance in Africa.
Under the Government of Japan’s initiative called “Enhanced Private Sector Assistance for Africa (EPSA)”, JBIC provides yen loan for the projects whose objective falls into one of the following five categories; (1) creating enabling environment, (2) strengthening financial systems, (3) building competitive infrastructure, (4) development of micro, small and medium enterprises and (5) promoting trade and FDI.
Focus
The possible areas of intervention includes economic and social infrastructure mainly in transport and power sectors, (including cross-border infrastructure), private sector development (through financial intermediary in Africa) and agriculture development with focus on marketing and distribution of the agro-products.
Instruments
There are following options of instruments;
- stand alone Yen loan;
- joint-co-financing with the African Development Bank (Accelerated Co-Financing Facility for Africa; ACFA) under EPSA;
- loans to non-sovereign borrower through African Development Bank under EPSA;
- co-financing with the World Bank.
Major Achievements
The first cross-boarder infrastructure project financed under ACFA was Road Improvement and Transport Facilitation Program on the Southbound Bamako-Dakar Corridor under EPSA for Africa, signed on March 31, 2006. In addition to AfDB, this project is co-financed with Government of Japan’s grant aid, Islamic Development Bank and KfW Development Bank of Germany.