Development finance institution, the African Development Bank (AfDB), has sold an Industrialise Africa theme bond to Fukoku Mutual Life Insurance Company for $39.21-million.
The bond, which will mature at the end of September 2027, will be used to support private sector industrial development and unlock the potential of small and medium-sized enterprises (SMEs) in the industrial sectors.
Industrialise Africa is one of five operational priorities for the AfDB. The other priorities are light up and power Africa, feed Africa, integrate Africa and improve the quality of life in Africa.
“Africa is at the bottom of the global industrial value chain because African economies rely on raw commodities. Its share of global manufacturing exports amounts to less than 1%,” the AfDB said in a release issued on Thursday.
The proceeds of the notes will be included in the ordinary capital resources of the AfDB and will be used for the general operations of the issuer in accordance with the Agreement Establishing the AfDB.
The AfDB will direct an amount equal to the net proceeds of the issue of the notes to lending projects within the strategic priority area, namely “Industrialise Africa”, subject to and in accordance with the AfDB’s lending standards.
Fukoku Life Insurance Company believes the bond may offer attractive returns on their policyholders’ funds while achieving a positive social impact in African countries.
The bond was offered to Fukoku Life in a private placement format with Daiwa Securities as the sole arranger of the transaction.