African Development Bank (AfDB) has launched a $3 billion post-Covid-19 support fund for Africa. Dubbed ‘Fight COVID-19’, the three-year social bond is aimed at alleviating the economic and social impact of the pandemic on Africa. The Central banks, financial institutions, treasury bills, and socially responsible investors bid over $4.6 billion to raise this sum.
The AfDB plans to lessen the severe economic and social impact this will have on the livelihood and economies of its member countries. It will pay an interest rate of 0.75%.
“These are critical times for Africa as it addresses the challenges resulting from the coronavirus. The African Development Bank is taking bold measures to support African countries. This $3 billion Covid-19 bond issuance is the first part of our comprehensive response that will soon be announced. This is indeed the largest dollar social bond transaction to date in capital markets. We are here for Africa, and we will provide significant rapid support for countries,” said Dr. Akinwumi Adesina, President of the African Development Bank Group.
African countries are in dire need of medical supplies, services, and infrastructure in the healthcare sector. The continent has about 3000 confirmed cases of people infected with coronavirus across 45 countries. It is estimated that the continent will require billions of dollars for contingency measures regarding the aftermath of the disease in several countries.
According to AfDB’s press release, Fight Covid-19 was allocated to central banks and official institutions (53%), bank treasuries (27%), and asset managers (20%). Final bond distribution statistics were as follows: Europe (37%), Americas (36%), Asia (17%) Africa (8%,) and Middle-East (1%).
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