By Business Insider Correspondent
The East African Development Bank (EADB) has signed a Sh5.2 billion loan agreement with the OPEC Fund for International Development, a strategic move set to significantly boost economic development and regional integration across East Africa.
The funding – EADB’s largest collaboration yet with the OPEC Fund – is expected to drive transformative growth by unlocking capital for small and medium-sized enterprises (SMEs) and investing in critical infrastructure in EADB member states including Kenya, Uganda, Tanzania, and Rwanda.
A boost for SMEs and infrastructure
The injection of capital will directly support SME financing, a sector widely regarded as the backbone of East Africa’s economic engine.
From agribusiness to light manufacturing and logistics, SMEs in the region continue to face challenges in accessing long-term, affordable credit.
EADB’s Acting Director General, Benard Mono, noted that the loan will enable the bank to scale its outreach to this vital segment:
“This agreement allows us to reach more SMEs and strengthen infrastructure that is essential for sustaining regional economic competitiveness,” he remarked.
Alongside direct financing, the OPEC Fund will also arrange an additional Sh3.2 billion in syndicated loans, further expanding access to funding for key sectors like transport, tourism, education, and agro-processing.
Economic impact across the region
The financing is expected to create a ripple effect across regional value chains, particularly in transport and logistics, by enhancing cross-border trade efficiency, agro-processing, by helping farmers and SMEs add value to exports and education and skills development, by supporting vocational infrastructure and institutions,
The loan will also positively affect tourism and services, through improved connectivity and supporting businesses.
Economists say such targeted capital infusions are vital for sustaining East Africa’s growth momentum amid a challenging global financial landscape.
“Investments of this nature strengthen the structural foundation of regional economies,” says Dr. Lydia Mwakalinga, a development economist based in Dar es Salaam.
Strengthening regional integration
The EADB-OPEC Fund agreement also aligns with the goals of the East African Community (EAC) and the African Continental Free Trade Area (AfCFTA), by enhancing the region’s capacity to build shared infrastructure, improve market access, and reduce non-tariff barriers.
By prioritising cross-border infrastructure and regional SME linkages, the deal will help integrate East African economies more closely, enhancing trade flows and competitiveness across the bloc.
A signal to investors
Abdulhamid Alkhalifa, President of the OPEC Fund, described the agreement as more than just a financing deal – it’s a vote of confidence in East Africa’s potential.
“By supporting SMEs and infrastructure in East Africa, we are investing in the region’s long-term prosperity and resilience.” Development finance analysts view this as a positive signal to global investors, who are increasingly looking to Africa for growth opportunities, but often hesitate due to risk perceptions and weak financing ecosystems.
