The African Development Bank has launched a AUD600 million ($463.9 million) social bond in Australia. Although the bank has issued social bonds in the past, it’s been selling them more frequently, as social bonds emerge as a key way to help cash-strapped countries during the coronavirus pandemic.
“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,” Akinwumi Adesina, president of the AfDB Group, said on a past social bond issuance.
More than 30 investors purchased the new bond, which will mature in five-and-a-half years. It is the AfDB’s seventh social bond since it launched a program for the instrument in 2017, and its fourth during the pandemic.
The launch comes weeks after Ghana announced its plan to issue a social bond this year, a decision that is expected to inspire other African countries to follow suit.
Social bonds provide capital to fund projects that are intended to create good social outcomes. Money raised from the AfDB’s social bonds have been designated for projects to improve access to electricity, water, and sanitation.
The instrument is increasing in popularity globally, as investors look to investments that meet environmental, social, and governance standards, or ESGs, which assess the sustainability and societal impact of investments.
This type of bond is expected to grow by 6% to $150 billion in funds raised this year, according to Moodys.
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