Japan inks $5.5B deal with AfDB to fuel Africa’s private sector investment

Japan and the African Development Bank (AfDB) have signed a $5.5 billion agreement to expand private sector investment across Africa. The deal, known as the sixth phase of the Enhanced Private Sector Assistance initiative (EPSA6), will run from 2026 to 2028 and builds on two decades of collaboration.

“This reflects the growing strength of our partnership and the increasing importance of our joint effort,” said Dr. Akihiko Tanaka, President of the Japan International Cooperation Agency (JICA), after signing the memorandum of understanding with the African Development Bank to seal the agreement. He noted that resilience tackling climate change and wider shocks would be a new priority under EPSA6.

AfDB Vice President Kevin Kariuki praised Japan’s role as an early mover in supporting Africa’s private sector:

“I wish to applaud the continued commitment of the Government of Japan towards Africa’s development. I am confident that we will consolidate the successes of our collaborations in a mutually agreeable manner.”

The $5.5 billion package is half a billion more than EPSA5, which mobilized $5 billion between 2023 and 2025. According to AfDB figures, EPSA has already generated $12 billion of support for Africa since its launch in 2005, with investments in power, connectivity, health, agriculture, and nutrition.

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Japanese investors have also been ramping up activity beyond EPSA. Data from Briter Bridges shows they have injected $1.8 billion into African startups across 14 countries since 2015. This week, Uncovered Fund and Monex Ventures announced a new ¥3 billion ($20 million) fund for early-stage companies in Africa and the Middle East, while Kenya signed a $169 million Samurai bond deal with Japan.

Previous EPSA phases have helped finance flagship projects such as Uganda’s Bujagali Hydropower Plant, RASCOM (Africa’s first communications satellite), the East Africa Submarine Cable System, Nigeria’s Lekki Toll Road, and the Kigali Bulk Water Supply project.