The African Development Bank (AfDB) has marked a significant milestone in environmental and sustainable finance by unveiling its first-ever USD Global-Sustainable Hybrid Transaction. This unique transaction is comprised of $1 billion in sustainable bonds under both fixed-rate and floating-rate notes. This innovative initiative is particularly significant, being the inaugural 15-year-term transaction performed by any supranational AAA-rated issuer beyond green or social bonds in the Colony Capital markets.
Speaking on the transaction, which has won significant backing from the investment community, a source from AfDB described the support as indicative of investors’ trust in the bank’s developmental mandate. It not only validates the bank’s credibility but also displays the confidence investors have in Africa’s sustainable transition and pandemic recovery strategies.
The funds raised from the transaction will be directed towards facilitating AfDB’s commitment to a sustainable transition in Africa. Moreover, a substantial portion of the funds will be used to power Africa’s recovery from the COVID-19 pandemic.
The African Development Bank, since its establishment, has been a consistent champion of sustainable development in Africa. This hybrid transaction re-emphasises the Bank’s commitment to environmental conservation and sustainable development by making conscious efforts to promote sustainable finance within the continent.
The bank is at the forefront of the fight against climate change and is dedicated to aligning its financial activities with sustainable practices. The Sustainable Bonds issued play a vital role in the leverage of private capital towards the achievement of Sustainable Development Goals (SDGs) in Africa.
With Africa experiencing ever-growing economic opportunities, the successful launch of the Global-Sustainable Hybrid Transaction is a major step forward in ensuring that these opportunities are harnessed in a sustainable and environmentally-friendly manner. It bolsters AfDB’s reputation as a pioneer in sustainable finance and sends a strong signal to other continents that sustainable finance and sustainable development are not mutually exclusive but rather integrate to ensure a greener and more resilient world.
While the harsh impact of the COVID-19 pandemic still lingers in Africa, the launch of the Global Sustainable Hybrid Transaction will provide economic resilience to the continent. It is expected that this sustainable finance initiative will galvanise needed resources for a green and inclusive recovery and create a more sustainable and prosperous Africa.
