AfDB raises $3bn social bond to combat coronavirus
Akinwumi Adesina, AfDB President

AfDB raises $3bn social bond to combat coronavirus

The African Development Bank (AfDB) has raised three billion dollars three-year bond to help alleviate the economic and social impact of Covid-19 pandemic in Africa.

The bank’s Communication and External Relations Department made this known in a statement on Friday.

The AfDB said the three-year bond was to cushion effects the pandemic would have on livelihoods and Africa’s economies.

The statement quoted the AfDB’s president, Dr Akinwumi Adesina as saying that it is the biggest Social Bond ever launched in international capital markets.

“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 4.6 billion dollars, is the largest ever.

“This is the biggest 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 per cent.

“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 Bank is taking bold measures to support African countries.

“This three billion dollars Covid-19 bond issuance is the first part of our comprehensive response that will soon be announced.

“This is indeed the largest social bond transaction to date in capital markets. We are here for Africa, and we will provide significant rapid support for countries” he said.

The statement also quoted Tanguy Claquin, Head of Sustainable Banking as saying that the intervention was to boost access to health, essential goods, services and infrastructure in Africa.

“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.

“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”.

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AfDB raises $3bn social bond to combat coronavirus