AfDB issues infrastructure bonds to Japanese company

23 Jul 2015

Summary

Issuance of infrastructure bonds is one of the alternative financing solutions which support investments in infrastructure projects.

Donald Kaberuke, President, African Development Bank

In demonstration of its commitment and contribution to infrastructure development in Africa, the African Development Bank (AfDB), through its Private Sector Operations department, has been making investments in the continent’s transport, energy, ICT and water sectors, which have resulted in improved quality of life for millions of people across Africa.

The AfDB recently sold $20 million worth of infrastructure bonds to a Japanese company, Fukoku Mutual Life Insurance Company. Issuance of infrastructure bonds is one of the alternative financing solutions which can support investments in various infrastructure projects while securing capital to match long-term needs.

According to AfDB, the Japanese company was the sole investor in the $20 million bond, which has a maturity date of July 24, 2025. While the AfDB will use net profits from the infrastructure bonds to finance lending to infrastructure projects, Fukoku Life said the infrastructure bonds could offer attractive return on their policy holders’ funds while achieving positive social impact in African nations.

The bonds were offered to Fukoku Life through a private placement format, with J.P. Morgan being the sole arranger of the bonds.


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