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The African Development Bank (AfDB) and the Japan International Cooperation Agency (JICA) have signed a 34.41 billion yen (about $300 million) loan agreement to enhance private sector lending in Africa, according to a statement released on Thursday.

The loan carries an interest rate of 0.35 percent with a tenor of 40 years after a 10-year grace period. It is the seventh Private Sector Assistance Loan from the JICA to the AfDB and it was provided under the Enhanced Private Sector Assistance (EPSA) initiative.

The AfDB said the loan is intended to promote economic growth and reduce poverty in Africa by supporting the private sector through its non-sovereign window.

The signing ceremony was held at AfDB headquarters in Abidjan in the presence of Hiroshi Kawamura, Japan’s Ambassador to Cote d’Ivoire; Ryuichi Kato, JICA Director General for Africa; and Tsutomu Iimura, JICA’s Chief Representative in Cote d’Ivoire. The AfDB was represented by Hassatou N’Sele, Acting Vice President for Finance and Helene N’Garnim-Ganga, the General Counsel.

“JICA is a very strategic partner of the AfDB and a major contributor to development in Africa,” N’Sele said. “Your support in promoting private sector growth, quality infrastructure and alleviating poverty has helped the Bank to grow its private sector portfolio more than ten-fold since the inception of the EPSA Initiative just over a decade ago.”

The loan agreement marks the conclusion of the 2nd phase of the EPSA Initiative and the beginning of the 3rd phase, which was announced at the 6th Tokyo International Conference on African Development (TICAD) held in Nairobi, Kenya in August 2016. The 3rd phase has a joint target of over US$ 3 billion for the next three years.

The JICA provided its first Private Sector Assistance Loan to AfDB in 2007, with a $100 million deal. This seventh loan brings total loans to $1.5 billion. The Private Sector Assistance Loans are one of three components of the JICA’s EPSA Initiative. The other two components are: the Accelerated Co-financing Facility (ACFA) for public sector co-financing with JICA and the Fund for African Private Sector Assistance (FAPA), a multi-donor thematic trust fund administered by the Bank.