In February 2022, the European Commission and AFD Group signed a €30 million guarantee agreement for Cityriz, AFD Group’s guarantee program for African banks wanting to finance sustainable urban infrastructure.
Cityriz is a key tool in advancing the territorial and ecological transition of African cities, combining bank guarantees and technical assistance. Via the Cityriz guarantee, AFD Group aims to promote the emergence or strengthening of domestic banking markets for local public debt, providing African cities of all sizes with access to financing in their local currency, with long maturities that meet their needs.
Cityriz makes lending to cities, and especially intermediate cities, less risky for private and public African banks.
The Cityriz guarantee is primarily designed for African public or private financial institutions aiming to develop their lending operations in the local public sector (local authorities or municipal operators) and contribute to the financing of sustainable infrastructure.
By contacting their local AFD field office, commercial and development banks planning to lend to local authorities can access a Cityriz guarantee and thus offer more attractive interest rates and longer loan maturities to cities and municipal operators with a higher risk profile.
The Cityriz guarantee is offered on a “loan-by-loan”, first demand, unconditional and irrevocable basis. It is valid for loans granted by banks to local authorities over a maximum period of fifteen years, in hard currency or local currency. The guarantee applies to a maximum of 50% of the total amount of the guaranteed loan, and up to a maximum guaranteed amount equivalent to €20 million.
In order to promote investment in at-risk communities, this guarantee facility has deliberately been priced at a more attractive rate for intermediate cities.
To facilitate the roll-out of this facility, the Cityriz guarantee also comes with technical assistance, financed by the European Union. This technical assistance enables us to support the banking sector and local authorities, by providing consulting, capacity-building and project preparation services, particularly with credit risk analysis and environmental and social risk management procedures.
The purpose of the Cityriz technical assistance is to:
