The African Developed bank (AfDB) established its social bond framework in 2017 and raised the equivalent of $2bn through issuances denominated in euro and Norwegian krone. In 2018, the bank was named as the ‘Second most impressive social or sustainability bond issuer” at the Global Capital SRI Awards.
“Our social bond programme enables us to highlight our strong development mandate to the investor community, allowing them to play a part in improving the lives of the people of Africa. This was an exceptional outcome for an exceptional cause,” said Hassatou Diop N’Sele, Treasurer at AfDB.
Amid the COVID-19 epidemic,AfDB raised $3bn Fight Covid-19 Social Bond is the largest dollar-denominated social bond ever launched in international capital markets to date, and the largest US dollar benchmark ever issued by the bank, with a three-year maturity, it will pay an interest rate of 0.75%.
According to Dr Akinwumi Adesina, president of the African Development Bank Group. “These are critical times for Africa as it addresses the challenges resulting from the coronavirus. The African Development Bank is taking bold measures to support African countries. This $3bn Covid-19 bond issuance is the first part of our comprehensive response that will soon be announced. This is indeed the largest dollar social bond transaction to date in capital markets. We are here for Africa, and we will provide significant rapid support for countries,”.
Coronavirus is spreading quickly in Africa and placing strain on health systems. It is estimated that the continent will require many billions of dollars to cushion the impact of the disease as countries scramble contingency measures, including commercial lockdowns in desperate efforts to contain it.
The Fight Covid-19 Bond was allocated to central banks and official institutions (53%), bank treasuries (27%) and asset managers (20%). Final bond distribution statistics were as follows: Europe (37%), Americas (36%), Asia (17%) Africa (8%,) and Middle-East (1%).
