THE AFRICAN Development Bank has raised $3 billion in a three-year bond to help alleviate the economic and social impact the Covid-19 pandemic will have on livelihoods and Africa’s economies.  

The Fight Covid-19 social bond, a bond where funds are raised for new and existing projects with positive social outcomes, gained backing from central banks and official institutions, bank treasuries, and asset managers including socially responsible investors.

It is believed to be 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. 

The African Development Bank Group said the initiative was aimed lessening the severe economic and social impact of this pandemic on its regional member countries and Africa’s private sector.

Dr. Akinwumi Adesina, President of the African Development Bank Group said: “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 $3 billion Covid-19 bond issuance is the first part of our comprehensive response that will soon be announced.”

He continued: “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 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. 

Billions of dollars needed

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. 

Among those who welcomed the move is Tanguy Claquin, Head of Sustainable Banking, Crédit Agricole CIB.

Claquin said: “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.” 

George Sager, Executive Director, SSA Syndicate, Goldman Sachs agreed.

‘A time of unprecedented market volatility’

He said: “In a time of unprecedented market volatility, the African Development Bank has been able to brave the capital markets in order to secure invaluable funding to help the efforts of the African continent’s fight against Covid-19.

‘Not only that, but in the process, delivering their largest ever USD benchmark. A truly remarkable outcome both in terms of its purpose but also in terms of a USD financing.”

We are here for Africa, and we will provide significant rapid support for countries. 

Dr. Akinwumi Adesina, President of the African Development Bank Group

The Bank established its social bond framework in 2017 and raised the equivalent of  $2 billion through issuances denominated in Euro and Norwegian krone.

In 2018 the Bank was designated by financial markets, ‘Second most impressive social or sustainability bond issuer” at the Global Capital SRI Awards.