The African Development Bank is to get a three-fold increase in its capital base to $90 billion, giving the Tunis-based lender far greater scope to meet the continent's funding needs, its head said on Friday. "It's significant, but you must bear in mind that in Africa now, the way the continent is going, we need to increase our firepower, especially to lend for infrastructure and the private sector," AfDB president Donald Kaberuka told Reuters from Washington. Six percent of the increase would be capital paid in over eight years, Kaberuka said. The rest will be "call-up capital" in the form of guarantees from the bank's rich-country backers. "The importance of the call-up capital is that it's a guarantee for us to go to the capital markets to borrow money competitively which we then pass on to our customers," he said. The AfDB said in December it would lend about $7 billion to African governments and firms in 2010, down from an estimated $10 billion last year when loan programmes were boosted in response to the global financial crisis. The AfDB's shareholders are Africa's 53 nations and 24 non-African donor countries. Much of its lending to poorer countries is at concessionary rates, largely financed by Western donors. One of its most significant loans last year was $1.5 billion in emergency budget support to Botswana after the collapse of the price of diamonds, the southern African country's main export.
