The Board of Governors of the African Development Bank Group has approved a $117 billion (88.1 billion Units of Account) General Callable Capital Increase for the African Development Bank to preserve its lending capacity and respond to the requirement of a credit agency. The approval increases the Bank's authorized capital from $201 billion (UA152 billion) to $318 billion (UA240 billion).

Announcing the approval during a press conference on Friday at the close of Bank Group's Annual Meetings in Nairobi, African Development Bank President Dr. Akinwumi Adesina said, "The additional callable capital allows us to maintain and leverage our firepower, while preserving our rating. I'm grateful to the group's shareholders and humbled by their level of confidence in the institution."

"It's a major demonstration of the faith and the confidence our shareholders have in us, and our ability to use our resources well to mobilize additional capital to do even more," Adesina added.

Bank Group Vice-President for Finance and CFO Hassatou Diop N'Sele said the Bank's AAA Ratings were reaffirmed by the four global rating agencies--Standard and Poor's (S&P), Moody's, Fitch and Japan Credit Rating (JCR)--in 2023, underscoring its very strong capital adequacy position, prudent financial management, very high liquidity coverage, excellent funding record, preferred creditor status and very strong shareholder support.

The rating criteria of one of the global credit rating agencies requires the African Development Bank to hold a certain level of AAA callable capital to support its lending growth. Given the recent downgrade of some of the Bank's major AAA shareholders, the need for an increase in callable capital became essential, she explained.

The Bank's shareholders expressed their strong support for the increase:

Hassan Abdalla, Governor of the Central Bank of Egypt and Governor of Egypt to the African Development Bank said: "Indeed, maintaining the AAA credit rating of the African Development Bank, Africa's premier development partner, is critical for us--as Bank shareholders--to enable the African Development Bank to provide sufficient development finance that adequately responds to Africa's pressing needs and challenges and accelerates transformation. Egypt congratulates the Bank for the approval of its General Callable Capital Increase and reiterates that it will spare no effort in continuing to support our Bank in its critical developmental mandate."

Parliamentary State Secretary Dr. Bärbel Kofler, of the German Federal Ministry for Economic Cooperation and Development confirmed Germany's readiness to subscribe to its share of the callable capital increase. "Germany continues to be a strong supporter of Africa's sustainable development, and of the African Development Bank as a key institution for supporting member countries' sustainable development trajectories. I therefore welcome the Board of Governors' decision on a General Callable Capital Increase to maintain the Bank's lending trajectory while securing its AAA credit rating. I am pleased to confirm that Germany, as the currently largest AAA-rated shareholder, is ready to subscribe to its share of the callable capital increase."

Prof. Njuguna Ndung'u, Kenya's Cabinet Secretary for National Treasury, Chairperson of the Boards of Governors of the African Development Bank Group said: "As host of the African Development Bank's 2024 Annual Meetings, Kenya is especially pleased all shareholders of the Bank have once again demonstrated their overwhelming support for the African Development Bank, Africa's premier financial institution, by unanimously approving the general callable capital increase of the Bank. We welcome this important signal to the market that the Bank is a strong institution committed to a standalone AAA."

Temporary Governor for South Africa, Mr Marlon Geswint said: "We commend management, the Board of Directors and the Board of Governors for working in unison to achieve a general callable increase that preserves the Bank's AAA credit rating and lending capacity. The agreed option is a significant statement of all shareholders' confidence in the Bank's policy importance and relevance. We have confidence that our combined efforts will further lead to a standalone AAA rating in the near future."

Inés Carpio San Román, General director for International Finance at the Spanish Ministry of Finance, Trade and Business said: "Spain is pleased to support the approval of a callable capital increase for the African Development Bank, being the first one of its kind among multilateral development banks. It ensures the Bank holds enough AAA callable capital to address rating agency requirements to face future challenges. Thanks to its financial strength, the African Development Bank plays a critical role in the sustainable development of the continent."

Alexia Latortue, Assistant Secretary for International Trade and Development, U.S. Treasury, said: "The United States congratulates the African Development Bank on the approval of a general callable capital increase of UA 88.1 billion ($117 billion). The Board of Governors' approval by consensus shows strong shareholder support and sends a clear signal to all stakeholders, including credit rating agencies, that the African Development Bank is financially sound, well managed, and has very strong shareholder support. The United States is proud to be the largest non-regional shareholder of the African Development Bank, and we stand united with the Bank as it continues to be a reliable partner to African countries."

The callable capital increase will enable the Bank to respond to its member countries' substantial development finance needs, also in view of increasing global challenges. At the same time, the significant approval of callable capital signals a decisive response to the global economic community's call for action by multilateral development banks under the G20 reform and evolution agenda.