(WAM) — The OPEC Fund for International Development, OFID, has signed a US$20 million term loan in favour of East African Development Bank, EADB. The bank will use the loan to support Small- and Medium-sized Enterprises, SMEs, and infrastructure projects in East Africa.

EADB is an important regional development institution for delivering key development objectives across the East Africa region. It enjoys a high level of commitment from member states Kenya, Uganda, Tanzania and Rwanda, as well a diverse shareholder base that includes multilateral and bilateral development institutions and international financial institutions.

SMEs account for more than half of EADB’s portfolio. They play an important part in development, driving economic growth and employment opportunities in East Africa and in developing countries more generally. The bank is expanding its resource mobilization activities to meet the growing financing needs of SMEs.

“We are very pleased to support private sector development in East Africa, which goes to the core of our mandate,” said OPEC Fund Director-General Dr. Abdulhamid Alkhalifa. “We have partnered with EADB since 2001 and we appreciate the opportunity to strengthen our relationship. SMEs are critical to achieving progress toward Sustainable Development Goal, SDG, 8 on decent work and economic growth. Efficient infrastructure, as part of SDG 9, improves access to social services, reduces business and production costs, supports trade, and will ultimately provide East Africa with a more competitive business environment.”

In turn, Vivienne Yeda, Director-General of EADB, commented, “By financing SMEs, we expect to promote enterprises that generate employment opportunities, social economic development and consequently promote regional integration. The SME sector is a critical pillar for sustainable economic growth as it is the backbone of the EADB member countries’ economies.”

This is the third loan the OPEC Fund has provided to EADB in support of SMEs. In 2001, the organization approved US$10 million, followed by a further US$15 million in 2013.

OFID was established in January 1976 by the then 13 member countries of OPEC; including the United Arab Emirates. It is the development finance institution established as a channel of aid to developing countries.