AfDB said the change allowed it to respond proactively to the strong economic progress of African countries over the past decade and underscored its mandate to help sustain inclusive growth in its regional member countries (RMCs) by allowing them access to financing for viable projects.

About 37 or nearly 70% of RMCs currently fall into the ‘low-income’ category and are therefore only eligible for concessionary development resources from the African Development Fund. But the bank said these diminishing and scarce concessionary resources were not sufficient to finance and sustain the current high rates of growth that African countries are experiencing.

‘This view is bolstered by the fact that many African countries borrow non-concessionary funds in the capital markets at rates that are significantly higher than what they could obtain from the bank,’ the AfDB said.

Access to the sovereign loan window will be available to countries at low or moderate risk of debt distress and will be subject to the International Monetary Fund’s Debt Sustainably assessment, a tool to better detect debt, prevent and resolve potential crises. The borrowing country must also have sustainable macroeconomic position as well as stringent oversight by the bank’s Credit Risk Committee, among other safeguards, the bank said.