- EPSA5 (2023–2025) surpassed its $5B target, mobilising about $5.6B in Japan–AfDB co-financing by end-2025.
- EPSA6 (2026–2028) commits up to $5.5B and adds “resilience” alongside priorities in power, connectivity, health, and agriculture & nutrition.
- Since 2005, the Japan–AfDB EPSA partnership has mobilised roughly $12B to catalyse private investment across Africa.
- Tools such as FAPA, blended finance, export credit, and guarantees are being expanded to de-risk projects and crowd in private capital, especially for infrastructure and climate transition.
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The Enhanced Private Sector Assistance for Africa (EPSA) represents a flagship collaboration between Japan and the African Development Bank (AfDB), intended to catalyse private sector investment in key sectors across Africa. As of end-2025, EPSA5 (2023–2025) has exceeded its $5 billion target with ~$5.6 billion in co-financing, signaling robust implementation and growing traction among stakeholders.
Moving into EPSA6, the $5.5 billion commitment for 2026-2028 adds “resilience” as a new priority—reflecting an adaptive strategy to address climate risk, debt stress, and other systemic shocks that threaten investment stability. Retaining focus on power, connectivity, health, agriculture & nutrition ensures continuity, but expanded thematic scope demands stronger risk assessment and project design capabilities.
Complementing EPSA’s financing commitments is the Fund for African Private Sector Assistance (FAPA), which has enabled roughly $30 billion in cumulative transaction value by de-risking early-stage deals and supporting enterprises and human capital. Programs under FAPA have supported over 200 businesses and trained more than 15,000 people.
Japanese financial institutions are deepening their engagement through instruments like blended finance, credit enhancement, export credit, political risk insurance, and local-currency guarantees. For example, SMBC has facilitated over $10 billion in flows linked to Japan, including ~$3 billion in Japanese investor-driven African instruments in recent years.
Strategic implications include: (1) the push toward integrating Africa into global value chains is accelerating, creating opportunities in sectors like critical minerals, infrastructure, and digital agriculture; (2) convergence among DFIs, commercial banks, host governments, and multilateral partners is becoming a precondition for large-scale deals; (3) sustainability is increasingly intertwined with return expectations—policy, regulatory reform, rule of law, and institutional capacity are non-negotiable; (4) risk mitigation tools (credit guarantees, political risk insurance, blended finance) are essential to mobilise commercial capital, especially in high-risk or high-upfront cost sectors.
Open questions remain: How will EPSA6 balance increased ambition with debt sustainability across recipient countries? Can Japan’s private sector significantly scale its pipeline to absorb these funds? What safeguards and metrics will ensure that resilience commitments translate into measurable climate and socio-economic impacts? And how will coordination among Japanese DFIs/ECA, AfDB, host governments, and global investors evolve to share risk and returns?
Supporting Notes
- EPSA5 (2023-2025) was launched at TICAD8 with a target of $5 billion; by end-2025, it had mobilised ~$5.6 billion in co-financing—exceeding the target.
- EPSA6 (2026-2028) was agreed during TICAD9 in Yokohama, committing up to $5.5 billion, $500 million more than EPSA5.
- The EPSA partnership has mobilised about $12 billion since 2005 via joint support from JICA and AfDB.
- Resilience was added as a new priority under EPSA6, alongside existing priority sectors: power, connectivity, health, agriculture & nutrition.
- FAPA has enabled an estimated $30 billion in cumulative transaction value, supported over 200 businesses, and trained over 15,000 people.
- Japanese banks’ involvement: SMBC has mobilised ~$3 billion from Japanese investors and now has Japan-linked flows exceeding $10 billion into African instruments.
- Partial credit guarantees and sustainability-linked bonds/loans exceeding $4 billion have supported entities in Benin, Côte d’Ivoire, Egypt, and Togo.