# Presentation: 077412

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## BANKING ON DEVELOPMENT 2007

**Effective Business Strategies for Working with the Multilateral Development Bank Private Sector Arms**
- Christel Fredrikson, U.S. Commercial Liaison
- Advocacy Center Liaison Office to the African Development Bank
- March 16, 2007

## Agenda

- Overview of African Development Bank Group
- Recent Developments at AfDB/in Africa
- AfDB Procurement Opportunities
- AfDB Private Sector Developments
- China

## African Development Bank Group

- Est. 1964: 53 RMCs,                                24 non-RMCs; 3 entities
- Temporarily based in                Tunis
- $2-3 billion annually in                 approved loans and grants
- Since 1967, $55 billion for                    over 3000 projects
- U.S. largest non-regional shareholder, yet U.S. procurement very low

**Notes:**
AfDB has opened up local offices in Kenya, Tanzania, Uganda, Rwanda, and Ethiopia

## Recent Developments

**AfDB:**
- Internal reorganization (June 2006)
- Advertised all manager positions (Fall 2006)
- New focus on infrastructure
- Local office openings

**Africa:**
- 50% of the continent recorded growth rates of 5% and above (15 countries have 5-year growth track record)
- Telecoms, tourism, energy, infrastructure, water, agribusiness, extractive industries

## Public Sector Procurement Opportunities

- Generally, same procedures as other Banks
- Email subscription, DACON through AfDB website (www.afdb.org)
- AC-AfDB project pipeline and approved/tendered projects

## AfDB Private Sector

- Incredible demand for financing across continent
- Time of change for Private Sector
- 1991: start-up focus on SMEs - $30-50 million
- Today: $350 million (2006) to $700 million (2007)
- 2010: minimum $1B/year; transition to EBRD model; sectoral focus and quadrupling of portfolio management team
- Strategy: partnerships, portfolio management, internal streamlining/responsiveness
- Business now coming to AfDB

## Risk Mitigation

- Technical Assistance: TDA-like funds from Japanese, Koreans, other non-RMCs for project development, project preparation
- Guarantees: mostly guarantees to other financial institutions
- Equity participation
- Increase in local currency lending to mitigate currency risk
- Niche lending on commercial projects: 10- to 15-year money

**Notes:**
Guarantees: only 1 current corporate guarantee, 3 in history of OPSM
More equity participation this year than cumulative ever.

## Chinese Involvement in Africa

- Africa's trade with China increased from US$10 billion in 2000 to over US$40 billion in 2006.
- China investing in all sectors, but especially in natural resources and energy
- China working on free trade agreements with African countries and regional blocs (FTA negotiations between China and the Southern African Customs Union (SACU) announced in June 2006).
- AfDB 2007 Annual Meetings in Shanghai: “Africa and Asia: Partners in Development”
- Varying opinions in publications: New colonial master? Beneficial counterweight to West?
- Recent backlash on imported workers, tech. transfer, safety; U.S. has a competitive advantage vis-à-vis China over the short-term

## Advocacy CenterU.S. Commercial Liaison to the  African Development Bank

**Christel Fredrikson**
**U.S. Commercial Liaison Office**
**16, Rue de Syrie**
**EPI: Bloc C, 3/A**
**1002 Tunis Belvedere, Tunisia**
**Tel:   +216.71.831.117**
**Fax:  +216.71.830.244****	**
**ac-afdb@mail.doc.gov**

- Advocacy CenterU.S. Commercial Liaison to the  African Development Bank

**Amy Tabine**
**Africa Regional Manger**
**Advocacy Center**
**1401 Constitution Ave., NW**
**Washington, D.C.  20230**
**Tel:   (202) 482.3896**
**Fax:  (202) 482.3508**
**Amy.Tabine@mail.doc.gov**

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