Japan, in partnership with the African Development Bank (AfDB), has launched a new $1.5 billion (Sh193.5 billion) funding facility aimed at promoting financial inclusion, green growth, food security and healthcare across Africa.
The initiative, named Impact Investing for Emerging Africa’s Development, was announced on the sidelines of the African Investment Forum’s (AIF) 2025 Market Day in Rabat.
This funding is part of Japan’s expanded engagement in Africa under the Enhanced Private Sector Support for Africa (EPSA) framework and is consistent with Japan’s broader efforts under TICAD 9. The program is designed to attract private investors along with development finance institutions.
Commenting on the initiative, AfDB Group President Sidi Ould Tarr emphasized the value of the Japan-Africa partnership in closing the continent’s funding gap.
“This continent is growing very rapidly and its potential is immense. But unlocking this potential will require both partnerships and innovative financing,” said Sidi.
He cited successful blended finance projects such as Kenya’s 35-megawatt Menengai geothermal power plant and Côte d’Ivoire’s agricultural growth program as examples of what such an approach can achieve.
The $1.5 billion facility complements EPSA, which is currently in its fifth phase and on track to reach its $5 billion (Sh645 billion) target by 2025. According to Japan International Cooperation Agency (JICA) Deputy Director-General Shigeo Honzu, the next EPSA Phase 6 aims to further expand the commitment to $5.5 billion (Shs709.5 billion) by 2026-2028, reflecting growing ambitions to foster private sector-led growth. Africa.
Japan’s African Private Sector Assistance Fund (FAPA) continues to play a vital role in project risk mitigation and commercial financing availability. AfDB Vice President for Finance and Chief Financial Officer Hassatou Nsele noted that FAPA-backed interventions supported an estimated cumulative transaction value of $30 billion (Shs3.9 trillion).
At the corporate level, the program has supported more than 200 companies and trained approximately 15,000 people.
Separately, the High-Level Panel discussed how co-financing, blended finance and credit enhancement can accelerate Africa’s integration into global value chains, particularly in infrastructure, critical minerals and agriculture. Executives from major Japanese financial institutions detailed how a mixed finance platform focused on political risk insurance, export credits and climate change is mobilizing billions of dollars for projects in Africa.
While there was a lot of optimism about Africa’s investment prospects, speakers warned that financing alone is not enough. AfDB officials emphasized the importance of strong institutions, sound regulation and policy reforms to ensure sustainable transformation across the continent.
