AfDB Launches First Ever ESG African Frontier-Currency Bond

The African Development Bank (AfDB), on 14 June 2022, launched a 19-billion Ugandan shilling (USD 5.07 million) 2-year theme bond to advance the ‘Feed Africa’ strategic priority.

The bond marks the first-ever African frontier currency-denominated environmental, social and governance (ESG) issuance by a multilateral development institution.

Due in June 2024, the bond will be settled in dollars at a fixed coupon of 10.5 percent. It was issued under the African Development Bank Group’s ‘Feed Africa’ strategic High 5 and marks the Bank’s first offshore UGX bond issuance in 2022.

Standard Chartered Bank arranged the transaction under the Bank’s Global Debt Issuance Facility. Capitulum Asset Management was the investor.

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The Bank will direct funds equal to the net proceeds of the issue to lending projects that advance the ‘Feed Africa’ strategic priority in accordance with its lending standards.

“We are pleased to collaborate with Standard Chartered Bank and Capitulum Asset Management to launch this inaugural African frontier currency ESG transaction. It will significantly contribute to our High-5 development priorities while extending our investor reach in Europe,” said Keith Werner, AfDB Division Manager for Capital Markets and Financial Operations.

“Our participation in the African Development Bank’s Ugandan shilling bond funding the ‘Feed Africa’ program helps us reach our goal to invest with a positive impact while providing an adequate yield in a frontier currency,” Theodor Kirschner, Fund Manager at Capitulum Asset Management commented.

Under its Feed Africa strategy, the AfDB is working to reduce poverty, end hunger and malnutrition, make Africa a net food exporter, and move Africa to the top of export-orientated value chains where it has a comparative advantage. Feed Africa’s overall goal is to make Africa a net food exporter by 2025.