The African Development Bank (AfDB) has set up a US$50mn line of credit to the Eastern and Southern African Trade and Development Bank (PTA). In addition, the bank has also approved an equity capital increase of US$6.8mn (payable) as well as a US$40.8mn (callable) for PTA.
A further US$1mn grant is being extended to PTA for institutional capacity building. This facility is being provided by the AfDB-managed fund for African private sector assistance, a trust fund supported by contributions from the Japanese government.
These facilities mark AfDB's fourth intervention in PTA since 1991. The last financing package was concluded in 2003, and featured a line of credit for US$30mn, and a technical assistance facility of US$900,000.
PTA Bank is a sub-regional development finance institution, whose main activities include providing development financial services such as trade and project financing. The aim of the equity capital investment is to strengthen the bank's capital base, while the line of credit will target the region’s private sector, financing projects in mining, manufacturing, agriculture, tourism and services.
The last two AfDB credit lines have generated over US$500mn in foreign exchange and created over 40,000 jobs.
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