The African Development Bank (AfDB) has recently launched a USD 500-million 3-year Green Bond transaction, with issue priced at Mid-Swaps plus 14 bps, equivalent to a spread of 18 bps over the UST 1.250% December 2018.
This represents AfDB’s return to the USD Green Bond market following two successful Swedish Krona transactions executed in 2014 and its USD 500 million 3-year Green Bond issued in October 2013. AfDB has taking advantage of global focus on the COP21 conference held in Paris, to highlight its commitment to leveraging climate finance to support African countries in their adaptation and transition towards green growth.
As described in its Green Bond framework reviewed by the Center for International Climate and Environmental Research, Oslo (CICERO), the proceeds of the Green Bond will support the financing of low carbon and climate resilient projects in line with AfDB’s ten year strategy. Eligible projects to be financed by the bond include climate change mitigation and adaptation projects in the field of renewable energy generation and energy efficiency, biosphere conservation, waste management, fugitive emissions and carbon capture, urban development and low carbon transport or water supply and access.
According to AfDB Treasurer, Hassatou N’Sele, “We recognize that climate change is one of the biggest threats to the success of the AfDB Group development mandate for Africa, and this is why environment and climate change are mainstreamed in all our activities. We have invested more than USD 7 billion in climate finance over the past four years, and are committed to triple our annual climate financing to reach USD 5 billion a year by 2020. We have a strong green bond framework and are committed to help Africa gradually transition to green growth”.
Keith Werner, Chief Treasury Officer, AfDB, also noted that “After completing two very successful USD benchmark transactions in 2015, this was a great way to finish off the year. Our dedicated green investor base again showed their strong support for AfDB’s role in helping African countries to address climate change, and it was perfect considering the backdrop of the COP21 conference taking place in Paris”.
