AfDB approves policy on Non Sovereign Operations

Peace Kanu, Abuja

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The African Development Bank Group has approved the Bank’s Policy on Non Sovereign Operations (NSO) to accelerate the continent’s transformation through various financial support mechanisms which includes loans, equity investments and trade finance.

According to a statement from the AfDB, the NSO would provide the framework within which the Bank through its private sector lending window may provide financing or investment without sovereign guarantees to private and public entities that meet specific eligibility requirements on non-concessional terms.

“AfDB Non-sovereign Operations (NSOs) refers to financing and investment operations that are not guaranteed by a State, covering mostly private sector transactions. They also cover non-sovereign guaranteed financing of eligible public sector enterprises, as well as financing of regional development finance institutions.

“The approval of the Policy comes at a critical moment when the Bank is seeking to accelerate inclusive and sustainable economic growth, and crowd in more private sector funding for strong and inclusive growth to drive economic transformation and sustainable development in its Regional Member Countries (RMCs),” it stated.

It also explained that the NSO Policy would complement the Bank’s overarching 2013 Private Sector Development policy framework, by defining what the Bank would do in the area of non-sovereign lending.

“This would enable the Bank to contribute to the sustainable economic growth and inclusive social development of its RMCs individually and jointly, in fulfilment of the Bank’s mandate. More specifically, the Bank’s engagement in its selected non-sovereign operations will aim to maximise the catalytic impact of its limited resources, while seeking to promote inclusive growth and the gradual transition to ‘green growth’ in its RMCs. It will also help scale up financing in the Bank’s High 5 priority areas of intervention. Under this NSO Policy, the Bank would provide financing to non-sovereign operations,” it explained.

Peace PIAK