AfDB issues $20 million infrastructure bonds to a Japanese life insurance company
The African Development Bank (AfDB) recently sold USD 20 million in infrastructure bonds to Fukoku Mutual Life Insurance Company (Fukoku Life). The company was the sole investor in the bond.
Issuance of the infrastructure bonds is one of the alternative financing solutions which can support investments in various infrastructure projects while securing capital to match long-term needs.
Africa still has massive infrastructure needs. Bridging the infrastructure gap could increase GDP growth by an estimated two percentage points a year. Since inception, and more recently through its Private Sector Operations department, the AfDB has been, and is still making substantial contributions to infrastructure development in Africa. The Bank’s investments in transport, energy, ICT and water, have resulted in improved quality of life for tens of millions of people across Africa.
Infrastructure development is one of the five operational priorities under the Bank’s ten-year strategy (2013-2022).The AfDB intends to significantly increase infrastructure financing on the continent - not just through its own lending- but by leveraging its financial resources.
The Bank will use net profits from the infrastructure bonds to finance lending to infrastructure projects.
Fukoku Life says the infrastructure bonds could offer attractive return on their policy holders’ funds while achieving positive social impact in African nations.
The bonds were offered to Fukoku Life through a private placement format, with J.P. Morgan being the sole arranger of the bonds.
Summary Terms of the AfDB Infrastructure Bonds
|
Issuer |
African Development Bank（AfDB） |
|
Currency |
USD |
|
Issue Amount (Settlement Amount) |
20,000,000 USD |
|
Settlement Date |
24 July 2015 |
|
Maturity Date |
24 July 2025 |
|
Dealer |
J.P. Morgan Securities plc |