The African Development Bank (AfDB) has launched and priced a $2 billion three-year Social Global Benchmark, its first social bond issued under its new sustainable bond framework established in September 2023.
Why is this important: The bond will enhance the bank's existing green and social bond programme, by facilitating the issuance of more innovative green bonds, social bonds and sustainability bonds. The issuance was successful with strong interest from high-quality investors, central banks, and official institutions as indicated in the growing order book of over USD 3.5 billion. The bank has also successfully secured the tightest pricing among Multilateral Development Banks (MDBs) both versus swaps and US Treasuries.
The Bottom line: This is quite promising as African entrepreneurs continue to grow the continent's ESG credibility through innovative and climate-friendly projects by leveraging its natural energy to boost economic growth and ensure social improvements. The fundamental issue has always been the funding needed for these projects which provides a credible rate of return for investors. The AfDB Social Global Framework will go a long to address that funding gap.