The African Development Bank and the European Investment Bank have both agreed to invest fresh $70m (N25.2bn) in the Development Bank of Nigeria.
Under the arrangement, the AfBD is to provide $50m in equity, while the balance of $20m is to be provided by the EIB.
According to a statement issued on Thursday by the AfDB, the amount will help to stimulate funding of critical sectors of the economy.
The Federal Government had created the DBN to confront financing difficulties hindering the private sector in the country.
The bank is to play an important and catalytic role in providing funding and risk- sharing facilities to the Micro, Small and Medium-scale Enterprises.
The statement quoted the Managing Director, DBN, Mr. Tony Okpanachi, to have said, “The Development Bank of Nigeria will overcome the funding gap in the Micro, Small and Medium-scale Enterprises space and help businesses unlock opportunities across Nigeria.
“The DBN’s ambition is strengthened by the financial and technical support of international partners, including the European Investment Bank and the African Development Bank.
“The new institution builds on international experience and uses a business model that has demonstrated proven success to enhance private sector investment across Africa and around the world where other financing options are inadequate or absent.”
It also quoted the Director, Financial Sector Development Department, AfDB, Stefan Nalletamby, to have said that private sector businesses were critical to the development of the Nigerian economy as they had huge potential for employment generation and output diversification.
He stated, “There has been under-performance of these businesses and this has undermined their contributions to economic growth. Among the issues affecting their performance, the shortage of finance, particularly investment finance, occupies a very central position.
“The Development Bank of Nigeria is expected to contribute to mobilising significant long-term financing to an important yet underserved sector with high development potential.”
The Vice-President, EIB, Ambroise Fayolle, said that new private sector investment was crucial to creating jobs and enabling businesses to expand.
Fayolle stated, “The European Investment Bank is pleased to support the new Development Bank of Nigeria to strengthen private sector investment in Africa’s largest economy