Fundraising: the option of non-sovereign loans

An open workshop was organized on Tuesday in Yaounde to acquaint managers of public companies to utilize innovative financing methods.

So far, the public enterprise funding sources mainly emanate from the state coffers. This method of financing has a number of limitations in that it sometimes runs down many investment priorities of the state, the construction of infrastructure.

The French Development Agency (AFD) proposes a new funding mechanism: non-sovereign loans. It has the distinction of being awarded to public companies without the guarantee of the State. This will allow the State to release the weight of these financial obligations, so as to inject the AFD financing in other strategic investments.

This is an initiative to support the training workshop on non-sovereign loan from AFD opened on Tuesday for seven public companies in strategic areas, according to experts, participating in the development of Cameroon (Camtel, Airports of Cameroon, Sonara, Feicom, Autonomous Port of Douala, Camwater, SCDP).

These methods will mainly help entrepreneurs to meet the challenge of fundraising. For the Minister of Finance, Alamine Ousmane Mey, "in a globalized world where competition is fierce, it is no longer possible for us to confine ourselves to traditional sources of financing."

AFD therefore proposes to train these business leaders to support them in seeking resources for the realization of their investments and the performance of their missions.

This will be discussed during this workshop "to prepare companies to better understand the AFD reading grid to present the prerequisites for a loan," said the director of the AFD, Hervé Conan.

These processes of accessing non-sovereign loans has certain advantages including that of placing the public company in a more competitive environment and enhance its reputation, because it must go through phases of financial rating.

"The public company will dock with the financial governance and can speak the same language as the development finance institutions because they understand the elements involved in the decision to finance investments," said Ousmane Alamine Mey.

For this first edition, seven companies were selected, but the government and the AFD have expanded the number of companies that may be eligible for non-sovereign loans and benefits from the budgets available to the AFD. The workshop ends on Thursday in Yaounde.