Kampala — The African Development Bank has raised an exceptional USD 3 billion in a three-year bond to help alleviate the economic and social impact that the COVID-19 pandemic will have on livelihoods and Africa's economies.
The Fight COVID-19 social bond, with a three-year maturity garnered interest from central banks and official institutions, bank treasuries and asset managers including socially responsible investors with bids exceeding USD 4.6 billion. This is the largest social bond ever launched in international capital markets to date and the largest US Dollar benchmark ever issued by the bank. It will pay an interest rate of 0.75 percent.
The African Development Bank Group is moving to provide flexible responses aimed at lessening the severe economic and social impact of this pandemic on its regional member countries and Africa's private sector.
"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. We are here for Africa, and we will provide significant rapid support for countries," said Dr Akinwumi Adesina, President of the African Development Bank Group.
Coronavirus cases were slow to arrive in Africa but the virus is spreading quickly and has infected nearly 3,000 people across 45 countries, placing strain on already fragile health systems. The cases in Uganda increased last night to 23 people just a week after the first case was recorded.
It is estimated that the continent will require many billions of dollars to cushion the impact of the disease as many countries scrambled contingency measures including commercial lockdowns in desperate efforts to contain it. Globally, factories have been closed and workers sent home disrupting supply chains, trade, travel and driving many economies toward recession.
"As the Covid-19 outbreak is dangerously threatening Africa, the African Development Bank lives up to its huge responsibilities and deploys funds to assist and prepare the African population through the financing of access to health and to all other essential goods, services and infrastructure," said Tanguy Claquin, Head of Sustainable Banking, Crédit Agricole CIB.
The Bank established its social bond framework in 2017 and raised the equivalent of USD 2 billion through issuance denominated in Euro and Norwegian krone.
Fight Covid-19 was allocated to central banks and official institutions (53 percent), bank treasuries (27 percent) and asset managers (20 percent).
"We are thankful for the exceptional level of interest The Fight Covid-19 Social Bond has raised across the world, as the African Development Bank moves towards lessening the social and economic impact of the pandemic on a continent already severely constrained. This was an exceptional outcome for an exceptional cause," said Hassatou Diop N'Sele, the African Development Bank Treasurer.