Africa's private sector growth receives a $5.5 billion boost as Japan and AfDB forge a stronger partnership.
In a significant development, the African Development Bank (AfDB) and the Government of Japan have agreed to a new financing deal worth $5.5 billion. This partnership, named the sixth phase of the Enhanced Private Sector Assistance initiative (EPSA6), marks a renewed commitment to driving growth, resilience, and long-term prosperity across the African continent.
The new phase of EPSA underscores the crucial role of private sector development in African economies. The focus areas for EPSA6 include power, connectivity, health, agriculture, and nutrition. Notable projects include Uganda's Bujagali Hydropower Plant, the East Africa Submarine Cable System, Nigeria's Lekki Toll Road, Rwanda's Kigali Bulk Water Supply System, and RASCOM, the continent's first pan-African communications satellite.
The AfDB President, Mauritanian economist Sidi Ould Tah, who initiated EPSA Phase 6, was sworn in on September 1, 2025, in Abidjan, Côte d'Ivoire. Tah's focus on resilience aligns with the new priority under EPSA6, which aims to help African economies withstand climate change and other external shocks.
The funding target for EPSA6 is a significant increase compared to its predecessor, with a goal of $5.5 billion. This increase reflects the growing importance of private sector development in African economies and the need for increased funding to support these initiatives.
Japan's ongoing support for EPSA has been praised by the AfDB Vice President, Kevin Kariuki, who called it a cornerstone of the AfDB's collaboration with development partners. The Government of Japan is one of the strongest shareholders of the African Development Bank and a major contributor to the African Development Fund.
The new phase of EPSA will provide concessional financing from the Japan International Cooperation Agency (JICA) to the AfDB. This partnership has so far facilitated $12 billion in joint financing for various African development projects.
Minister Kato, representing the Government of Japan, emphasized that the renewed focus on resilience in EPSA6 would be particularly beneficial for African nations facing high debt burdens. Africa has immense potential for market expansion, according to Minister Kato, and EPSA6 aims to capitalize on this potential to drive economic growth and resilience.
The agreement was formalized with a Memorandum of Understanding, signifying a strong commitment from both parties to work together to support the development of Africa's private sector. With EPSA6, Japan and the AfDB are expanding the scope of their cooperation, not just increasing their financial commitment.
As of the current status, EPSA5, launched in 2022, had a $5 billion financing commitment for the period 2023-2025. As of now, EPSA5 has mobilized $4 billion, with an additional $1.6 billion in projects at advanced stages of financing, expected to be finalized by the end of 2025. This successful track record of EPSA5 provides a strong foundation for the implementation of EPSA6 from 2026 to 2028.
EPSA is the largest and longest-running bilateral partnership between the AfDB and Japan, instrumental in strengthening Africa's private sector. The partnership between the AfDB and Japan continues to play a crucial role in supporting the development of African economies and driving growth and resilience across the continent.
