The African Development Bank (AfDB) has completed a €170 million Sustainability-Linked Loan Facility to Mota-Engil Africa, signaling a new chapter in mobilizing private capital for sustainable infrastructure.
Structured with Deutsche Bank and advised by Ashurst LLP, the transaction combines AfDB’s €120 million partial credit guarantee with commercial bank financing—creating one of the Bank’s first direct guarantees for a non-sovereign borrower in Africa.
By anchoring the deal on measurable sustainability metrics, the African Development Bank sustainability-linked loan 2025 demonstrates how multilateral institutions can derisk private investment while ensuring tangible environmental and social impact.
From Public Debt to Private Capital
Africa’s infrastructure needs exceed $130 billion annually, yet limited fiscal space and rising debt costs have constrained public-sector borrowing. The AfDB’s new facility represents a structural shift: instead of lending directly to governments, the Bank is leveraging credit guarantees to crowd in commercial lenders for corporate-led, pan-African projects.
According to Solomon Quaynor, AfDB Vice President for Private Sector, Infrastructure and Industrialization, “This signing represents a significant step forward in our efforts to use guarantees to leverage and unlock affordable commercial financing for Africa’s development.”
The approach aligns with the AfDB’s High 5 priorities—industrialize, integrate, feed, power, and improve the quality of life for Africans—by using financial innovation to attract private investment at scale.
Financing a Portfolio of Sustainable Projects
The facility will finance a multi-country portfolio of infrastructure projects across more than a dozen African nations. These include:
-
Transport infrastructure such as roads, ports, and bridges.
-
Water and sanitation systems enhancing urban resilience.
-
Environmental and energy-efficient civil works that align with the Paris Agreement.
All projects fall under Mota-Engil Africa’s Sustainability-Linked Financing Framework, which integrates sustainability objectives directly into financing performance.
The Key Performance Indicators (KPIs) embedded in the facility include:
-
Improved health and safety standards across project sites.
-
Increased female representation in management roles.
-
Expanded local employment and skills development.
These KPIs ensure that every euro disbursed supports not only economic growth but also measurable social progress—making this one of Africa’s most advanced sustainability-linked instruments to date.
Why This Facility Matters
The African Development Bank sustainability-linked loan 2025 breaks new ground in three key areas:
-
Innovation in Credit Support
The €120 million partial guarantee allows commercial banks to lend confidently to African corporates by mitigating political and credit risks. This model can be replicated for energy, transport, and social infrastructure projects across the continent. -
Catalytic Impact
By linking financing costs to sustainability outcomes, the structure rewards companies for achieving climate and inclusion targets—transforming ESG commitments into quantifiable economic incentives. -
Scalable Blueprint
The transaction establishes a replicable framework for blending multilateral guarantees with private capital, enabling other African corporates to access lower-cost, long-tenor funding for impact projects.
Mota-Engil Africa: Building for Impact
Mota-Engil Africa, the regional arm of Portugal-based Mota-Engil Group, has long been active in large-scale infrastructure delivery—from roads in Angola and Mozambique to ports in Ghana and logistics projects in Zambia.
Under the new facility, the company will accelerate investments that advance climate-resilient infrastructure and inclusive employment. The focus on measurable social outcomes reinforces its strategy to align construction excellence with environmental responsibility.
For Mota-Engil, this facility strengthens its ability to execute public-private partnerships (PPPs) and scale sustainable projects that meet both community and investor expectations.
AfDB’s Expanding Role in Blended Finance
The transaction is part of the AfDB’s broader strategy to mobilize $25 billion in private capital annually by 2030 through instruments such as partial guarantees, co-lending, and risk-sharing facilities.
Blended finance allows the Bank to use its strong credit rating to unlock investment flows for sectors that traditional lenders consider high-risk.
This latest deal also complements the AfDB’s initiatives under the Africa Investment Forum (AIF)—a marketplace connecting institutional investors with bankable projects—and the Sustainable Energy Fund for Africa (SEFA), which supports clean-energy development.
Legal Innovation Behind the Deal
Global law firm Ashurst acted as international legal counsel to the AfDB, structuring the facility and coordinating cross-border compliance across multiple jurisdictions.
Partner Tom Longmuir led the team, supported by senior associate Samia Khennous and counsel specializing in sustainability and arbitration.
According to Longmuir, “This transaction supports the AfDB’s objective of mobilizing private capital for impact finance and highlights Ashurst’s expertise in multilateral credit support in emerging markets.”
Unlocking a Pipeline of Private-Sector Projects
The success of this first-of-its-kind facility could pave the way for similar partnerships between development banks and regional corporates.
By demonstrating that credit guarantees can de-risk impact-aligned lending, the African Development Bank sustainability-linked loan 2025 opens a pathway for pension funds, insurers, and sovereign wealth funds to co-invest in Africa’s infrastructure renewal.
As other engineering and utilities firms adopt sustainability-linked frameworks, the blended-finance model pioneered here could evolve into a continental standard for sustainable project finance.
Toward a Sustainable Infrastructure Future
Africa’s infrastructure boom must now evolve into a sustainability-driven growth cycle—one that connects profitability with purpose.
By bridging public and private capital, the AfDB and Mota-Engil partnership provides a template for financing that is both commercially viable and socially accountable.
As Vice President Quaynor put it, the facility “delivers sustainable infrastructure to drive inclusive growth, job creation, and resilience.”
The message is clear: the future of African development finance will be built not only on loans, but on confidence, collaboration, and climate-aligned capital.
