African Development Bank Group to invest $80 million in Ekiti Knowledge Zone

The African Development Bank Group has approved an $80 million loan to finance the Ekiti Knowledge Zone project in Nigeria.

African Development Bank Group to invest $80 million in Ekiti Knowledge Zone
Former Ekiti Governor, Kayode Fayemi (R) who initiated the process for the $80 million deal and the AfDB President (L)

The Ekiti Knowledge Zone project in Nigeria has received approval for an $80 million loan from the African Development Bank Group (AfDB). This initiative, supported by the federal government and led by the Ekiti state government, aims to foster digital innovation and entrepreneurship.

“The Bank’s financing will leverage other development partners’ programs and bolster the development of world-class infrastructure, including a 20-hectare green technology park and services infrastructure like roads, electricity, water supply, and wastewater treatment facilities,” according to the Ekiti state government. The total project cost is estimated at $94.8 million, with the state government providing $14.8 million in counterpart funding.

According to Lamin Barrow, AfDB group director general of the Nigeria country department, “The Ekiti Knowledge Zone Project design responds to the requirements of technology firms and prospective investors as indicated during the preparation phase, lessons learnt from similar Bank-financed projects such as the Cabo Verde and Senegal technology parks, and drew insights from good practices of similar initiatives in the continent and globally.”

The Zone aims to stimulate digital innovation and entrepreneurship, resulting in the generation of 26,000 jobs and an annual contribution of approximately $14 million in net economic benefits. Achieving these targets involves attracting investors and businesses, including tech startups, business process outsourcing firms, fabrication and production companies, research institutes, and corporate back-office operations.

Additionally, investors will be incentivised to establish a Special Purpose Vehicle, enabling multiple investors to collectively finance initiatives within the Zone.

According to a statement from the Ekiti state government, the Ekiti Knowledge Zone has received free zone status from the Federal Government. This designation enables the Zone to provide incentives like free repatriation of capital, profits, and dividends for foreign investors, land without rent during construction, tax holidays, waivers on import/export duties, and expatriate quotas.

Moreover, the project will also enable the creation of the Ekiti State Innovation Fund, aimed at offering pre-seed and early growth stage funding to support entrepreneurship, innovation, and investment. It is anticipated that the Fund will attract investments for over 50 seed and early-growth startups.

Earlier this year, Tracy Okoro, the state adoption lead at the Nigeria Startup Act secretariat told that Ekiti is one of the twelve states in the country that have indicated interest in domesticating the Startup Act.

It's noteworthy that the $80 million loan from the AfDB originated from a proposal presented to the bank's president, Akinwumi Adesina, by the former governor of the state, Kayode Fayemi, four years ago.

“It is exciting to see that our efforts, which began a few years ago during my tenure, to establish Ekiti as the knowledge economy of Nigeria and the preferred destination for innovation, technology, artificial intelligence, science, and digital initiatives, are starting to bear fruit,” Fayemi said in a congratulatory message to the state government.

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