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.
About a decade ago, as the international community was embarking upon the 2030 agenda for sustainable development and advocating for institutional investors to invest in sustainability assets, TDB launched its Class B shares targeting pension funds, sovereign wealth funds and others. The African Development Bank took the lead and became the first investor in Class B shares. The launch of Class B has been a huge success and today, TDB counts 20 institutional investors as part of its shareholder community, which now represents about a third of TDB’s total paid-in shareholder capital.
Admassu Tadesse, TDB Group President Emeritus and Managing Director 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.”
Akinwumi Adesina, African Development Bank Group President 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”
Alongside critical reforms implemented over the last ten years, the diversification of TDB’s capital structure has enabled TDB to continue mobilizing debt capital on increasingly attractive terms, achieve investment grade ratings, and scale-up its impact in the region it serves. Class C Green+ Shares are senior, and shareholders will earn annual dividends in the same way that existing Class B shareholders do. Building on TDB’s successful track record generating double-digit returns on equity and development impact on a triple bottom-line basis, Class C Green+ Shares are another step in the right direction.
About TDB
Established in 1985, the Eastern and Southern African Trade and Development Bank (TDB) is a multilateral, treaty-based, investment-grade development finance institution, with 44 sovereign and institutional shareholders and assets of USD 8bn. TDB serves 23 economies in its region, with the mandate to finance and foster trade, regional economic integration, and sustainable development.
TDB is a part of TDB Group, which also comprises the Trade and Development Fund (TDF), Eastern and Southern African Trade Advisors Limited (ESATAL), TDB Captive Insurance Company (TCI) and the TDB Academy. www.tdbgroup.org
Lebara Group is now bringing its affordable and reliable mobile services to Africa, starting with Ni...
• Gates Foundation commits $1.6 billion over five years to Gavi.• Bill Gates warns of rising ch...
Transport and food prices have been climbing steadily across Africa in recent years. In Côte d’Ivoir...
In a West African financial landscape marked by tighter regulation of the fintech sector, digital fi...
• Maritime sector faces renewed risks amid military tensions in the Middle East• Blockade fears at S...
• Mercedes Trucks signs agreement with Senegal to build a truck and commercial vehicle assembly plant.• The project will create hundreds of jobs...
• Ghana launches NAIMOS as the central authority to combat illegal mining activities nationwide.• The secretariat’s mandate includes environmental...
• Two major Nigerian universities to host innovative training programs focused on leadership, innovation, and sustainability.• 200 students and teachers...
• India’s NMDC launches a strategic center in Dubai to boost mining acquisitions in Africa.• A three-year copper and cobalt exploration campaign starts in...
In northern Ethiopia, in the Tigray region, lies Axum (also spelled Aksum), an ancient city that once stood at the heart of one of Africa’s most powerful...
Lake Natron, located in northern Tanzania near the Kenyan border, is one of the most extraordinary and extreme lakes in Africa. Fed primarily by the Ewaso...