AFRICAN DEVELOPMENT BANK GROUPEPSA OVERVIEW PRESENTATION
September 2020

Table of Contents
01. What is EPSA
02. Basic Information about ACFA
03. Special Features on EPSA 4
04. Conclusion

I. What is EPSA?
1-1. What is EPSA (Enhanced Private SectorAssistance)
1-2. ACFA (Accelerated Co-Financing Facility forAfrica)
1-3. PSIF (Private-Sector Investment Finance)
1-4. FAPA (Fund for Private Sector Assistance)
1-5. NSL (Non - Sovereign Loan)

I. What is EPSA?
I.1 What is EPSA?
A framework for resource mobilization and development partnership between AfDB andGovernment of Japan• The Enhanced Private Sector Assistance (EPSA) Initiative is aninnovative, multi-component, multi-donor framework for resource
mobilizationanddevelopment
partnership
tosupport
implementation of the African Development Bank (AfDB) Strategyfor Private Sector Development.
• Drawingon
successful
development
experience in Asia and around the globe, EPSA was conceived inpartnership with the Government of Japan (GOJ), which hasprovided generous financial support to its implementation since2005

WebsiteAfDB Main Website: http://www.afdb.org/en/topics-and-sectors/initiatives-partnerships/enhanced-private-sectorassistance-for-africa-epsa-initiative/

I. What is EPSA?
I.1 What is EPSA?
Announced July 2005 Gleneagles G8Summit

Announced May 2012 Camp David G8
SummitAnnounced August 2016 TICAD 6

Announced August 2019 TICAD 7

A new co-financing facility has been established : Private-Sector Investment Finance (PSIF).

I. What is EPSA?
I.2 ACFA (Accelerated Co-financing Facility for Africa) ACFA is one of the major components under EPSA, with recent announcement at TICAD 7 that both

AfDB and JICA will jointly target 3.5 billion USD in 3years (including the PSIF for private sector
operations from 2020).

 It is a co-financing facility for sovereign projects (normally infrastructure projects or in somecases program loans) It has 2 co-financing schemes: joint and parallel. For joint projects, AfDB functions as Lender’sAgent on behalf of JICA.

 AfDB and JICA signed a general MOU and agreed on ACFA Guidelines (and Technical Annex)

which was revised in 2012 and further revised in 2019.

 JICAhas made special arrangement for ACFA projects under preferential terms andconditions.

 For the Recipient Government, co-financing under ACFA can maximize the ADF allocationthreshold with AfDB.

1-2. Approved ACFA Projects so far(Unit: million USD)
#CountryProject

SectorApprovalDate(JICA)

Road Improvement and Transport
Facilitation Program on the
1 Senegal
Transport
31-Mar-06
Southbound Bamako-Dakar
Corridor (Bank: Senegal, Mali)
Arusha – Namanga – Athi River
2 Tanzania
Road Development Project (Bank: Transport
9-Mar-07
Tanzania, Kenya)
Montepuez – Lichinga Road
3 Mozambique
Transport
19-Mar-07
Project
4 Uganda
Bujagali Interconnection ProjectEnergy
30-Oct-07
Power Supply, Transmission and
5 Cape VerdeEnergy
25-Mar-08
Distribution Project in Santiago
Transport Facilitation Program for6 Cameroon
the Bamenda-Enugu Corridor
Transport
31-Mar-09(Bank: Cameroon, Nigeria)
Nacala Corridor Phase I (Bank:
7 Mozambique
Transport
10-Mar-10
Mozambique, Malawi)
Nile Equatorial Lakes Countries
8 Uganda
Interconnection line (Bank:Energy
26-Mar-10
Burundi, Rwanda, Uganda, Kenya,
9 Tanzania
Road Sector Support ProjectTransport
31-May-10
Iringa-Shinyanga Backbone
10 Tanzania
Energy13-Dec-10
Transmission Investment Project
The project to Strengthen and11 Cameroon
Extend the Electricity
Energy4-Mar-11
Transmission and Distribution(Subtotal EPSA 1)

TotalProject
Cost

JICA
AfDB

JPY
millionUSD
million293.13

960

8.60

87.20

147.09

6,857

59.11

53.28

107.86

3,282

29.45

44.97

74.70

3,484

28.63

28.63

49.29

4,468

37.86

7.28

455.08

4,540

44.99

336.80287.51

5,978

60.00

150.73272.23

5,406

61.23

199.01357.96

7,119

76.12

235.94478.94

6,048

64.51

68.49

94.97

2,939

33.67

50.94

2,618.76

51,081484.301,263.27

7

1-2. Approved ACFA Projects so far#CountryProject

Electricity Transmission andDistribution Network
Botswana,
Kazungula Bridge Project (Joint,13,14Zambia
Parallel)
15 Tanzania
Road Sector Support Project II
Nacala Corridor Phase III
16 Mozambique(Parallel)
Batchenga Lena Road
17 Cameroon
Development Project
POWER SECTOR REFORM
18 Angola
SUPPORT PROGRAM (PSRSP)
Kenya-Tanzania Power
19 Tanzania
Interconnection ProjectGreen Morocco Plan Support
20 Morocco
Program
Rusumo-Kayonza Road
21 Rwanda
Improvement Project
Construction of a New Bridge
across the Volta River on the
22 Ghana
Eastern Corridor Project (JICAProject Name - Parallel)
12 Cape VerdeSector

ApprovalDate(JICA)

Country

Project

AfDB

30-Mar-12

90.66

6,18678.11

Transport

12-Oct-12

259.3011,612149.2081.60

Transport

8-Apr-13

342.44

7,659

96.20

225.31

Transport

29-Nov-13

150.19

6,773

86.61

58.52

Transport

7-Apr-15

514.87

6,264

53.16

229.70

Energy17-Aug-15

1,200.00

23,640200.001,000.00

Energy15-Jan-16309.26

11,84798.23

159.06

Agriculture

4-Mar-16

264.0016,347132.00132.00Transport

13-Jul-16

376.51

6,889

56.01

244.43

Transport

5-Dec-16

91.23

11,239

91.23

0.00

3,598.46
6,217.22

108,456 1,040.75
159,537 1,525.05

2,144.10
3,407.37

TotalProject
Cost

JICA
JPY
USD
million million

AfDB

SectorApprovalDate(JICA)

Yaounde-Brazzaville International
Corridor Development ProjectTransport
30-May-17(Mintom-Lele）
Gounghin – Fada N'Gourma Road
24 Burkina Faso
Transport
2-Mar-18
Improvement Project(Subtotal EPSA 3)(Subtotal EPSA 1+2+3)
23 Cameroon

JICA
JPY
USD
million million

Energy(Subtotal EPSA 2)(Subtotal EPSA 1+2)

#TotalProject
Cost

13.48

513.71

5,894

57.28

255.85224.76

5,659

51.19

107.5011,553108.47
171,090 1,633.52

363.353,770.72738.47
6,955.68

8

I. What is EPSA?
I.3 PSIF (Private Sector Investment Finance): Debt & Equity
DEBTEQUITY

Corporate Loan

Agribusiness (upstream to downstream), Manufacturing, Socialsector (Health, Education etc.) , Infrastructure

Project FinancePower & Energy, Infrastructure such as Transport (port, airport,road, railway) , Water and sewerage, Waste to Energy, Health etc.

Financial Institutions(Bank Loan)

Local Tier 1 –Tier 2 banks outreaching to SMEs, MFIs, farmers andvulnerable people. Multi-project facility for climate change etc.

Private EquityInvestment
Fund Investment(Limited Partner)

Ranging from early-stage to growth-stage
Strong justification of JICA participation required
Climate change (renewable energy, energy efficiency), SMEs,
vulnerable regions/countries etc.

Note: Mezzanine products (sub-debt, preferred equity, etc.) can be also considered.

I. What is EPSA?
I.3 PSIF Criteria
Partner(Client)

Purpose(Impact)“Quality Company” (SDGs-aligned, ESG-centric etc.).
Both private enterprises and sub-sovereign entities.
1. SDGs (Sustainable Development Goals)
2. Climate change
3. Quality infrastructure

Supplement

Necessity to take more risks (tenor, price etc.) than commercialbanks to supplement bankability/investability of the projectJapan Nexus

Certain Japan-nexus preferable but NOT must
Strong development story is a big plus (or even prevail)Use ofProceeds

CAPEX primarily required for development impact.
CAPEX related WC may be considered together with CAPEX on acase-by-case basis.

I. What is EPSA?
I.3 PSIF Major Terms (Debt)
Amount$10M - $150M as typical ticket size. Maximum amount of JICA loan should be equal to the leadco-financier (or, sometimes 70% of total project cost)

Currency

JPY, USD and EUR
Limited local currencies are also available through cross-currency swap operation

Interest RateTenor

Repayment

Fees
Security
Safeguards

JPY: FILP Rate* + Margin (Fixed)
USD: 6 month LIBOR + Margin (Floating)
Country risk premium is not included in the Margin
Up to 20 years (door to door: with grace period up to 5 years)
Generally longer than commercial loan especially for Corporate and FI Loan
Semi-annual repayments
Same rate of front end fee and any other fees applicable with co-financiers.
Standard and customary security package including financial covenants
Compliance with JICA’s Environmental and Social Guidelines* FILP (Fiscal Investment andLoan Program) Rate is longterm low interest funding by
the Japanese government toachieve policy objectives andutilized by Japanese official
agencies such as JICA.
Currently FILP rate for 10 years
is 0.01% p.a.

I. What is EPSA?
I.3 PSIF Major Terms (Equity)
AmountCurrency

EIRR

Exit Strategy

Necessity

Safeguards

Max. 25% of total capital (PE) / fund size as a Minority Investor$5M - $20M as typical size for private equity investment$10M - $50M as typical size for fund LP investment
No currency limitation in principle
No explicit hurdle rate.
To be determined by evaluating the level of risk.
Exit Strategy is MUST and agreed among shareholders
5-7 years as typical investment period with various Exit Strategye.g. strategic sale (put option), trade sale (M&A), market sale (IPO) etc.
Strong reason for JICA participation in case of private equity investmente.g. sovereign hook, business model that requires patient capital etc.
Compliance with JICA’s Environmental and Social Guidelines

I. What is EPSA?
I.4 FAPA (Fund for African Private Sector Assistance)
 FAPA is a Trust Fund to support private sector development in Africa in line with the private sector
development strategy of the AfDB
 It was first established as a bilateral Trust Fund by GOJ in 2005, and was transformed into
multilateral Trust Fund in 2010 with the participation of Austria.
 The current share of contribution is as follows: To date, there has been 82 projects totaling USD 66m.

Japan

USD 81.25m

AfDB

USD 10.65m

Austria

USD 2.65mInterest &Inv. Income

USD 4,85m

TOTAL

USD 99.4m

I. What is EPSA?
I.5 NSL (Non - Sovereign Loan) NSL is back-financing to AfDB’s Non - Sovereign Operations on concessional terms.
 In principle, although the resources are pooled with the other financial resources of the Bankand subject to normal Bank processes, the Bank shall attribute the utilization of NSL proceeds tospecific operations.
 Thus, the projects to be financed under this scheme need to be appraised by AfDB directly.
(JICA does not have a relation to project formulations & operations.) NSL 7 of USD 300m eq. was signed between the Finance VP and JICA’s Director General for
Africa on June 15th, 2017. (https://www.afdb.org/en/news-and-events/afdb-japan-internationalcooperation-agency-sign-us-300-million-loan-for-enhanced-private-sector-assistance-17117/)

1-5. NSL (Non - Sovereign Loan)EPSA1=USD 500m
NSL
Project NameCountry
Type Pillar
1 1 (Mar 2007) Access Bank of Nigeria
Nigeria
LOC FI/SME
2 1 (Mar 2007) Zenith Bank
Nigeria
LOC FI/SME
3 2 (Dec 2007) Bujagali Hydroelectric Power Project Uganda
LOAN INFRA
4 2 (Dec 2007) Sahanivotry Hydro
Madagascar LOAN INFRA
5 2 (Dec 2007) RASCOM
Regional
LOAN INFRA
6 2 (Dec 2007) Access Bank*
Tanzania
EQ FI/Micro
7 2 (Dec 2007) TCX
Multinational EQFI
8 2 (Dec 2007) EASSy*
Multinational LOAN INFRA
9 2 (Dec 2007) BOAD*
Multinational LOC
FI
10 2 (Dec 2007) BCI
Mauritania
LOC FI/SME
11 2 (Dec 2007) EVHA (Health Fund)*Multinational EQ FI/SME
12 2 (Dec 2007) Investrust*
ZambiaLOC FI/SME
13 2 (Dec 2007) Lekki Toll Road
Nigeria
LOAN INFRA
14 2 (Dec 2007) Mauritania Leasing*
MauritaniaLOC FI/SME
15 2 (Dec 2007) MPEF II
Multinational EQ FI/SME
16 2 (Dec 2007) Zanaco*
ZambiaLOC FI/SME
17 3 (Jan 2012) Lake Harvest Aquaculture
Zimbabwe
LOAN AGRI
18 3 (Jan 2012) AAFRegional
EQAGRI
19 3 (Jan 2012) Agri VieRegional
EQAGRI
20 3 (Jan 2012) Citadel Fund
Regional
EQFI
21 3 (Jan 2012) WAEMF
Regional
EQ FI/SME
22 3 (Jan 2012) Takoradi II Expansion
Ghana
LOAN INFRA
23 3 (Jan 2012) SME APEX Facility*
Tunisia
LOAN FI/SME
24 3 (Jan 2012) ATI*
Regional
EQ FI/SME

NSL 1(USD 100m eq.)

NSL 2(USD 300m eq.)

NSL 3(USD 100m eq.)15

1-5. NSL (Non - Sovereign Loan)EPSA2=USD 1000m
NSL

Project Name

4 (Mar 2014)
4 (Mar 2014)
5 (Oct 2014)
5 (Oct 2014)
5 (Oct 2014)
5 (Oct 2014)
5 (Oct 2014)
5 (Oct 2014)
6 (Sep 2015)
6 (Sep 2015)
6 (Sep 2015)
6 (Sep 2015)
6 (Sep 2015)
6 (Sep 2015)
6 (Sep 2015)
6 (Sep 2015)
6 (Sep 2015)
6 (Sep 2015)
6 (Sep 2015)
6 (Sep 2015)
7 (June 2017)
7 (June 2017)
7 (June 2017)
7 (June 2017)
7 (June 2017)
7 (June 2017)
7 (June 2017)

OLAM
AFC
EADB*
EADB*PTA Bank*Afeximbank
BOAD*Africa SME Program*
ZEP ReXINA Solar One Project
Kukuza PDC (PDPAI)
Mouline Moderne du Mali (M3)LAPO
Moringa Agroforestry Fund
Equity Bank
Development Bank of Nigeria
ACRF II
Africinvest III
Kigali Bulk Water Supply Project
Alitheia Identity FundETC Group Limited
Segou Solar Photovoltaic
Abraaj Health Fund
Boost Africa
Rx Healthcare Fund
OLAM
Export Trading Group (ETG)CountryType

PillarAmount (millionUSD)

Multinational
Regional
Regional
Regional
Regional
Regional
Regional
Regional
Regional
South Africa
Regional
MaliNigeria
Multinational
Kenya
Nigeria
Mutinational
MutinationalRwanda
Mutinational
Multinational
Mali
Multinational
Regional
Multinational
Multinational
Multinational

LOAN
LOC
LOC
EQ
LOC
LOC
EQ
LOC
EQ
LOAN
EQ
LOAN
LOC
EQ
LOC
EQ
EQ
EQ
LOAN
EQ
SCFF
LOAN
EQ
EQ
EQ
LOAN
LOAN

AGRI
FI
FI/SME
FI/SME
FI/SME
FI/SME
FI/SME
FI/SME
FI
INFRA
INFRA
AGRI
FI
AGRI
FI
FI
MULTI
MULTI
INFRA
MULTI
FI
POWER
FI
FI
FI
FI
FI

80
200
40
2450
150
4.18
125
4100
522.161212.58
148
50
45
22.38
20
12.5
100
9.32
2554.73
20107
100

NSL 4(USD 100m eq.)

NSL 5(USD 300m eq.)

NSL 6(USD 300m eq.)

NSL 7
(USD 300m eq.)16

2. Basic Information about ACFA

2-1. Eligible Countries / Key points
2-2. Type of Co-Financing: Joint or Parallel
2-3. Terms and Conditions of JICA ODA Loans toACFA Eligible Countries

2. Basic Information about ACFA
2.1 Eligible Countries / Key points
1. Eligible Countries:• Basically, if the country is eligible to borrow from JICA, ACFA can be applied.
• JICA basically is in line with the World Bank IDA Signal System:• IDA grant element 100%: Does not lend
• IDA grant element 50%: Cautiously examines case by case
• IDA grant element 0%, or blend or IBRD: In terms of debt sustainability,
no obstacles for lending.
• JICA additionally may exclude/ include a country depending on the bilateraldiplomatic relationship, etc.
2. Key points for Japanese ODA side:• County Assistance Policy (Ministry of Foreign Affairs)
http://www.mofa.go.jp/policy/oda/assistance/country2.html• Relation with Japanese Companies (MoF, MoFA, METI)

2. Basic Information about ACFA
2.2 Type of Co-Financing: Joint or Parallel
Definition
Procurement
Guidelines/Environmental& Social
Guidelines

Joint
Co-financing on the same component/
contract by ratio

ParallelCo-financing on a different
component/ contract individually

Generally, Bank’s Guidelines andProcedures are applied, considering thatthe guidelines of each agency share thesame fundamentals with only few
exceptions, which needs to be dealt with.
Environmental and Social Guidelines
should be enforced by each organization.
(Technical annex 3.)

Each agency will apply its own
Guidelines for the relevant
component(s)/contract(s)2. Basic Information about ACFA
2.2 Type of Co-Financing: Joint or Parallel
Joint
The Bank will act as Lender’s Agent inconducting the necessary procedures onbehalf of JICA. The Bank will issue JICA
ACFA Notice when confirms the contents ofRequest for Disb. from the Borrower.

Parallel
Each agency will conduct its own
necessary procedures.

Ex-postEvaluation

The Bank will conduct the PCR, and share
the result with JICA. The Bank is expected
to consult with JICA on the contents of PCR
prior to such missions. The Bank also
shares the results of Ex-post evaluation toJICA if it conducts such evaluation.

Each agency will conduct its own expost evaluation. In the case of JICA,
JICA will do ex-post evaluation 2years after project completion for all
projects in addition to PCRs.

AdministrativeCost (= ACFAFee)

JICA pays the agreed amount to the Bankfor the service of Lender’s Agent.

No ACFA Fee for Parallel co-financing
projects.

Procurement
Supervision,
Disbursement,etc

2. Basic Information about ACFA
2.3 Terms and Conditions of JICA ODA Loans to ACFA Eligible Countries
Category

Fixed/
Variable

Low-Income Least Developed Countries(- US$ 995)
Least Developed Countries
orLow Income Countries(- US$ 995)
LowerMiddle
IncomeCountries(US$996 – US$3,895)
UpperMiddle
IncomeCountries(US$3,896 – )Interest Rate (%)

Repayment Period(years)

Grace Period(years)

Fixed

0.01

4010Floating¥LIBOR + 25bp

30

10

Fixed

0.55

3010Floating¥LIBOR + 65bp

30

10

Fixed

0.95

3010Floating¥LIBOR + 85bp

3010Fixed

1.153010

The above only shows the Preferential Terms (better than standard terms and conditions) since ACFA Projects are eligible for it.
JICA offers several options for a lower interest rate product for shorter tenure/ grace period. See the following URL for the whole options.
https://www.jica.go.jp/english/our_work/types_of_assistance/oda_loans/standard/index.html
Major Economies under each category is shown in the following URL.
https://www.jica.go.jp/english/our_work/types_of_assistance/oda_loans/standard/c8h0vm0000aoex8o-att/index_2018_01.pdf

3. Special features on EPSA 4
 ACFA: Infrastructure development consistent with the G20 Principles for Quality
Infrastructure Investment and possibly development policy loan to improve thebusiness environment
 PSIF: Collaboration between JICA’s Private Sector Investment Finance and theBank allowing for increased direct co-financing of non-sovereign operations by JICA
FAPA: Support for priorities jointly agreed upon under EPSA 4: activities thatensure improved debt sustainability and create an investment-friendly environment.
 Quality infrastructure investment in line with G20 principles

Conclusion


ACFA is one of the major components under EPSA and is an efficient way
to expand the output of ADF projects.
PSIF will stimulate economic activity and improve the living standards ofpeople in developing countries through equity investments and loans forprojects undertaken in developing countries by the private sector.

For starting the formulation of co-financing projects…
 Contact EPSA focal point to start discussion
 Contact JICA country officeThank you for your kind attention!

Contact Us
EPSA Focal Point (Co-Financing and Syndication – FIST 1) - AfDB
Mail: epsa@afdb.org
EPSA Focal Point (Planning and TICAD Process Division , Africa Department, JICA)
Onizuka - Onizuka.Ryosuke@jica.go.jp
Private Sector Investment Finance Division/JICAIwahashi.Tatsuro@jica.go.jp; Owada.Kei@jica.go.jp; Kimura.Asako@jica.go.jp;

Enami.Yuko2@jica.go.jp;