AfDB to Meet Investors Over Hybrid Capital

“This is a great new way to enhance a multilateral development bank’s capital base and optimise its balance sheet. The African Development Bank is starting a new asset class, hybrid capital, issued by AAA-rated multilateral development banks,” said the Bank’s Vice-President for Finance and Chief Financial Officer, Hassatou N’Sele.

Acting Treasurer, Omar Sefiani, noted that this hybrid capital transaction will open new opportunities for the bank and other AAA-rated multilateral development banks to boost lending by tapping private investors.

“While the bank has been very active in generating additional lending capacity through risk reduction transactions on its assets, this transaction boosts its capital base and thus generates additional lending through its liabilities,” Sefiani stated.

The bank said that hybrid capital would have a multiplier effect on the bank’s financing, and allow for the issuance of additional green, social and sustainability bonds to finance projects targeting some of the continent’s most critical development challenges, including food security, access to water and sanitation, health services, and climate change.