Financing projects and programs in African countries is among the mandates of the African Development Bank (AfDB). To realize this, the bank has approached various international markets seeking investments and assistance. The institution’s 2019 borrowing program involves entering capital markets for a loan of over US$7 billion.
Though the Bank accesses a wide array of capital markets, the majority of its borrowing are in US dollars and Euros, as well as through the issuances in other public markets such as Australian dollars and Pound sterling.
The AfDB, which maintains an active presence in the socially responsible investment arena, continues to be a regular issuer of Green and Social Bonds. These products serve to satisfy increasing demand for impact investment but also allow the Bank to highlight its development mandate and promote sustainable and inclusive growth.
The Institution has also used its ‘High 5’ operational priorities for transforming Africa as a platform to continue the issuance of theme bonds. The priority areas under the ‘High 5’ theme are, Light Up and Power Africa; Feed Africa; Industrialize Africa; Integrate Africa; and, Improve the Quality of Life for People of Africa.
Based on these priorities, the Bank has already launched an ‘Integrate Africa’ bond, a ‘Feed Africa’ bond, more than forty ‘Improve the Quality of the Life for the People of Africa’ bonds, and two taps of its ‘Light Up and Power Africa’ bond.
The Bank, which is keen to innovate and diversify its product range, has been able to combine innovation with its social responsibility program and issue the first ever Green SOFR-linked bond, in November of 2018.
The AfDB also said it would continue to promote the development of African Capital markets with the issue of local currency denominated debt to facilitate the financing of its local currency operations, alongside other initiatives.
“We continue to raise our profile in the capital markets to provide cost-effective resources to finance projects and programs on the African continent. We have a strong track record, a diversified funding profile, investors across the world and the benefits of a AAA rating to strongly support the African Development Bank mandate,” the Bank’s Treasurer, Hassatou N’Sele said recently.
The African Development Bank is rated triple-A by all the major international rating agencies and enjoys several solid ESG (Environmental Social and Governance) ratings. In 2017, the Bank disbursed US$7.51 billion to finance projects and programs in its Regional Member Countries, exceeding its target for non-sovereign operations by 56 percent.