Dutch development agency FMO and the Emerging Africa Infrastructure Fund (EAIF) have signed a contract for a new FMO loan package, which will support the growth of EAIF.
The package consists of two revolving credit facilities, one of €25 million and the other also of U$25 million. This financial product is unique in that EAIF can draw and repay funds two times per month, in US dollars and in euros, while the currencies of both the facilities can be swapped twice a year.
The loan has a tenor of 5 years, which can be extended every year by FMO and EAIF for a total period of up to 15 years. Through these elements FMO strives to offer EAIF the maximum flexibility that it needs to optimize its liquidity management.
Since its inception FMO has played an important role in supporting EAIF, both through funding as well as through knowledge sharing via, for example, staff secondments. The current transaction follows from a longstanding and strong partnership between FMO and EAIF.
FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With an investment portfolio of EUR 6.6 billion, FMO is one of the largest European bilateral private sector development banks.
The EAIF is a US$587.02 million debt fund that provides loans to infrastructure projects in Africa. It was established in 2002 and has since committed over US$900 million to more than 40 projects in developing countries. The fund is financed through equity from the Private Infrastructure Development Group (PIDG) and supported by loans from both development finance institutions, such as FMO, and commercial banks.