During the African Development Bank’s annual meeting in May, participants underlined the need to bridge the continent’s infrastructure gap to fuel economic growth. The bank’s response: the largest known infrastructure bond to date.
AfDB’s announcement that it will float Africa’s first infrastructure bond, worth $22 billion, to its member nations — regional and otherwise — marks a significant move for the bank to “tap into our own resources,” its president Donald Kaberuka was quoted as saying.
The funds —aiming to exceed annual AfDB and World Bank commitments to sub-Saharan Africa by $3 billion — would support various infrastructure projects, like the construction of roads and rail lines.
In 2010, the Tunis-based AfDB became the leading source of multilateral funding for new African infrastructure.
Although this is the first time it is floating an infrastructure bond, AfDB has issued various bonds since 2005 through its local currency initiative or linked to the Botswana Pula, Ghana Cedi, Kenya Shilling, Tanzania Shilling, Uganda Shilling, Zambian Kwacha, Nigerian Naira and South African rand. In July 2012, the AfDB opened books on a “landmark” 125 billion Uganda shilling bond program.
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