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Oliver Kazunga, Senior Business Reporter
THE African Development Bank (AfDB) has raised an exceptional US$3 billion in a three-year bond to help alleviate the economic and social impact that Covid-19 pandemic will have on livelihoods and Africa’s economies.

In a statement, AfDB said 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 US$4,6 billion.

It said the facility was 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 regional financier said it was moving to provide flexible responses aimed at lessening the severe economic and social impact of the pandemic on its regional member countries and Africa’s private sector.

AfDB president Dr Akinwumi Adesina said:

“These are critical times for Africa as it addresses the challenges resulting from Covid-19. The bank is taking bold measures to support African countries. This US$3 billion Covid-19 bond issuance is the first part of our comprehensive response that will soon be announced.

“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.”

The order book for the record-breaking bond highlights the scale of investor support, which the African Development Bank enjoys, said the arrangers.

“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,” said head of sustainable banking and crédit, Mr Tanguay Claquin.

AfDB noted that coronavirus cases were slow to arrive in Africa, but the virus was spreading quickly and has infected thousands of people across 45 countries, placing strain on already fragile health systems.

It is estimated that the continent will require billions of dollars to cushion itself against the impact of the disease as many countries scrambled contingency measures, including commercial lockdowns in efforts to contain it. Globally, factories have been closed and workers sent home, disrupting supply chains, trade, travel, and driving many economies toward recession.

AfDB established its Social Bond framework in 2017 and raised the equivalent of US$2 billion through issuances denominated in Euro and Norwegian krone.

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