AfDB Issues 50m Australian Dollar 15-year Kangaroo Bond Due March 2038

The African Development Bank (AfDB) has successfully launched a 50 million Australian Dollar (AUD), 15-year Kangaroo Green Bond due March 2038.

The new issuance was arranged by RBC Capital Markets and sold to a single Japanese investor, Taiju Life Insurance Company.

According to a statement yesterday, this was the AfDB’s sophomore green bond in the Australian dollar market since the inaugural 15-year Kangaroo green bond was issued in 2016, and marked an extension of the bank’s existing Kangaroo curve.

It stated that the funds raised through the green bond transaction would support the Bank’s efforts in the areas of climate change mitigation and adaptation.

“The bond proceeds will finance eligible green projects, including forestry conservation projects, aimed at supporting the transition to green growth in Africa in accordance with the AfDB Green Bond Framework.

“Despite renewed global efforts toward climate change evidenced by the new and ambitious climate targets established at the 27th Conference of the Parties (COP27) through the United Nations Framework Convention on Climate Change (UNFCCC), Africa requires particular attention and a more targeted response,” it stated.

It noted that Africa, with its unique biodiversity and ecosystems, including savannas, mountains, plateaus, deserts, and its variety of organisms and plants, was threatened by climate change unlike any other region. As a result, the transition to green growth in Africa has become even more important and urgent.

Japan’s announcement of the “Africa Green Growth Initiative” to promote and attract investments into sustainable green growth in Africa, was ample evidence of its recognition of the need for the transition. The announcement was made at the 8th Tokyo International Conference on African Development (TICAD8) in August 2022.

“In order to promote sustainable development in Africa, the Bank’s Ten-Year Strategy focuses on two overarching objectives: to promote inclusive growth and to support African countries transition to green growth.

“The Bank has contributed to improving the lives in Africa by providing better access to water, energy and food, enabling sustainable use of natural resources, and promoting innovations, employment and economic growth.

“The transaction is the Bank’s 2nd green bond issued in 2023 across all currencies, following on from a successful SEK 1.5 billion 5-year Green Bond issued in the Swedish krone market in January,” it added.

Meanwhile, the Sustainable Energy Fund for Africa (SEFA) of the AfDB has approved a technical assistance grant of $5.03 million to implement the Africa Super Energy Service Companies (ESCO) acceleration program in Rwanda, Senegal and South Africa.

SEFA is a bank-managed multi-donor special fund that works to unlock private sector investments in renewable energy and energy efficiency. Super ESCOs are vehicles that channel funds into public sector energy efficiency investments such as hospitals, schools, and street lighting, paving the way for private investment.

“The acceleration program catalyses private sector investments in energy efficiency by operationalising Super ESCOs, thus stimulating the transition toward more sustainable and greener economies.

“The grant will support the training of a team to operate Super ESCOs and support private ESCOs in the three countries to develop their Energy Performance Contract services. Private ESCOs provide services to energy users to design and implement energy efficiency options.

“The funding will also underwrite the development of harmonised regional certification schemes for ESCOs and energy service professionals, including energy auditors, managers, and energy savings measurement and verification professionals,” Mr. Saer Diop, Director-General of Senegal’s Agence pour l’Economie et la Maîtrise de l4Energie (AEME), which promotes energy efficiency said.