The European Investment Bank has supported the economic development in East Africa for a long time. Since 2003, almost EUR 1.6 billion have been invested in loan and equity investments in the following fields:

·         Financial sector development

·         Energy

·         Transport

·         Water and sanitation

·         Promotion of regional integration, etc.

As the EU bank, it acts in a catalytic way by offering financing conditions that cannot be provided by the market alone, and by supporting project preparation and implementation. The use of an innovative and constantly evolving range of financial instruments which leverage additional funding is crucial to ensuring the long-term results of projects in Central and East Africa.


EIB’s role goes beyond lending to include blending, combining EIB loans with EU grants and subsidies, and bringing our expertise to bear throughout the project cycle through technical assistance (TA). It finances operations across Africa, the Caribbean and the Pacific (ACP) through the ACP Investment Facility, a revolving fund, in addition to its own resources.


The countries addressed in this TA Project – especially Kenya, Uganda and Tanzania – have a long-lasting relationship with the EIB. The global loan facilities, Private Enterprise Finance Facility (PEFF) and Microfinance Facility (MFF), totalling to around EUR 1 billion are intended to support Micro, Small and Medium-sized Enterprises through participating financial intermediaries (FIs). The group of currently 27 FIs that is eligible for this TA Programme is highly heterogeneous, including commercial SME banks, government and development banks, regulated MFIs and housing banks.

The Facilities

Terms and Conditions of the PEFF

The credit line facilities promote the development of economic activities by encouraging and facilitating new investments and growth of private enterprises in key sectors of the economy. The purpose is to facilitate the expansion, diversification, modernization or start-up of enterprises through financing loans and leasing transactions with a loan tenor in line with the long-term nature of the investment projects.


The credit lines provide long-term funds priced on market related terms. Small and medium-sized enterprises stand to benefit from fixed or floating interest rates and from the increased offer of finance with maturities well exceeding those commonly available in the market. The access to long-term loans and finance leases through these facilities will help businesses manage the Cash flow requirements of their investment projects and avoid liquidity shortfalls.


The funds under the facilities are available in local currency, EUR and USD.


Loan duration

Minimum tenor of transactions to be funded is 4 years for loans, and 3 years

for leases and small loans (less than EUR 50,000 equivalent). Maximum tenor is

10 years including an adequate grace period.


Grace Period

Assessed by the Partner Bank, depending on the characteristics of the project to be

financed in particular the moment from which the project provides a cash flow.


Interest Rates

Funding in local currency is priced at fixed interest rates for the whole tenor of the finance transaction; funding in EUR or USD may be provided at fixed or floating rates, at the borrower’s choice. Interest rates are freely negotiated between the Partner Bank and its borrower; they will include the market based cost of EIB’s AAA funding, as well as a margin to cover the Partner Bank’s credit risk and administrative costs.


Loan Sizes

Minimum of EUR 10,000 and a maximum in the range of EUR 3 - 5 million


Owner’s contribution

Project promoters should be able to demonstrate a reasonable commitment of own funds (equity) that back the investment – to be determined in negotiation with the Partner Banks.


PEFF’s contribution

The EIB funding is limited to 50% of the project cost for loans and up to 100% of the capital amount of a finance lease.


Eligible project costs

The project cost may include land, buildings and related construction costs, equipment, plant, furnishings, services (e.g. marketing and feasibility studies, professional fees associated with the project), provisions for contingencies, interest during construction if applicable, and a reasonable allocation of working capital.


Implemented by

This project is funded by the European Union


AFC Agriculture and Finance Consultants, Bonn, Germany

Team Leader: Mr Guillermo Bosse

Email: Guillermo.Bosse (at)

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