MUFG acted as joint coordinator, MLA and bookrunner for a USD$400 million loan agreement for African Export-Import Bank (Afreximbank) to support COVID-19 responses through private sector investment and finance. The financing was arranged jointly with Sumitomo Mitsui Banking Corporation under the Private sector investment finance operation of Japan International Cooperation Agency (JICA), as JICA Coordinators.

The novel coronavirus disease (COVID-19) pandemic has significantly affected the entire African continent. Social and economic activities have been hindered due to the pandemic, which in 2020 resulted in its worst historical GDP growth rate, recording negative 1.7% in Sub-Saharan Africa [1] and negative 1.1% in North Africa [2]. In order to recover smoothly from the pandemic, provision of health and medical services, including COVID-19 vaccination, is essential. Also, COVID-19 revealed that strengthening Africa's healthcare system is critical, with an increased need for medical and pharmaceutical products as well as infrastructure such as hospitals.

JICA's loan will be used to manufacture medical and pharmaceutical products including vaccine manufacturing lines, development of supply bases for those products, and development of medical and health facilities such as hospitals, through Afreximbank.

It will also mobilize Japanese commercial banks' capital within the continent. This will lead to creation of a stronger healthcare system as well as smoother recovery of social and economic activities from COVID-19. It is also aligned with Sustainable Development Goal 3 (“Good health and well-being"), Goal 9 (“Industry, innovation and infrastructure"), and Goal 17 (“Partnerships for the goals").

This transaction bolsters MUFG's track record of supporting Africa and Afreximbank with COVID-19 responses, following a USD$207 million financing closed in late 2021 and a USD$520 million facility, the first to be covered by Nippon Export and Investment Insurance (NEXI), in 2020.

Ankit Khandelwal, Director for Africa, MUFG, commented:

"We are extremely proud to contribute to Afreximbank's efforts in supporting COVID-19 responses where they are greatly needed. This transaction highlights our strategic objectives of supporting clients over the long term and contributing to the communities in which we operate in sustainable manner.

"We look forward to continuing to working with Afreximbank on projects such as this one, which contribute significantly towards Africa's growth and recovery from COVID-19."

Amr Kamel, Executive Vice President of Afreximbank, said:

"I am delighted to attend today's signing ceremony, where we renewed our commitment – along with our partners – to accelerate Africa's industrialisation, a central strategic pillar of the Bank's activities.

"The facility ratified here today supports the Bank's COVID-19 intervention program which aims to manage the economic, social and health impacts of the COVID-19 pandemic on our member countries.

"It will also strengthen Africa's healthcare sector and significantly bolster Africa's manufacturing capacity and thereby encourage economic growth and long-term, sustainable job creation."

Shohei Hara, Director General of Japan International Cooperation Agency commented:

"We are delighted to be able to contribute to Africa's COVID-19 responses, especially in the context of an increase in vaccine production capacity in Africa. JICA's Private Sector Investment Finance is committed to respond timely to meet the needs of our clients such as Afreximbank."

[1] Source: IMF

[2] Source: African Development Bank