The African Development Bank and the Eastern and Southern African Trade and Development Bank (TDB) have united to launch a unique financial instrument to catalyze financing for sustainable development on the continent.
At the ongoing global climate summit, COP27, the African Development Bank on Wednesday announced an investment commitment of $ 15 million in TDB’s Class C Green+ Shares.
This is the first equity instrument of its kind to provide a pathway for institutional investors to support climate action with risk capital, with each dollar invested to be leveraged four times into qualifying projects and transactions. More broadly, the shares are designed to accelerate TDB’s financial innovation and contributions to the Sustainable Development Goals (SDGs), the African Union’s Agenda 2063 and the Paris Agreement on Climate Change, the bank said in a statement published on its website.
Speaking on the initiative, the TDB Group President Emeritus and Managing Director, Admassu Tadesse said: “We are grateful for the pioneering role of the African Development Bank in the launch of this novel instrument, which is already generating much interest from other investors. Building on the successful model of green bonds, this catalytic, paid-in, equity investment will bolster TDB’s capital position and enable us to step up our impact in the climate space. Together, we are making African capital work for Africa’s development, while delivering competitive returns.”
The President of the African Development Bank, Akinwumi Adesina, applauded the initiative. He said: “This is a great innovation that will catalyze public development banks and other financial institutions to do more in expanding climate financing and green growth. The African Development Bank Group will mobilize investment partners for the Trade and Development Bank and will help to replicate this with other financial institutions. We want to green Africa’s financial systems”
