AfDB, IFC plan to issue bonds for Zambia projects

The African Development Bank and the World Bank’s private sector arm plan to finance programmes in Zambia by issuing bonds worth a total 5.2-billion kwacha, a senior regulator in the country said on Friday.

Wala Chabala, CE of Zambia’s Securities and Exchange Commission, said the African Development Bank planned to raise 2.7-billion kwacha and the International Finance Corporation (IFC), a further 2.5-billion kwacha through the local currency bond programmes.

“They have registered with us and these have been approved. It’s feasible the two transactions could happen before the end of the year,” Chabala said at a media briefing.

The two institutions would not raise all the money at the same time but would keep tapping into the local capital markets as and when the need for financing arose, he said.

“This affords an opportunity to investors in Zambia, especially institutional investors, to invest in the AfDB and IFC, which would then invest the monies in their programmes in Zambia,” Chabala said.

The move by the two multilateral institutions to raise funds in local currency is likely to strengthen the capital markets and support the kwacha, he said.

The bonds issued by IFC will be launched under its pan-African domestic medium-term note programme, allowing it to issue bonds regularly in the region. Proceeds will be used to fund IFC private sector projects in areas such as infrastructure.

Other countries included in the programme are Botswana, Ghana, Kenya, Namibia, Rwanda, South Africa, Uganda and Zambia.

The IFC issued its first Nigerian naira bond in February, raising 12-billion naira at a yield of 10.2%. Investors in the five-year issue, dubbed the “Naija bond” after a popular local nickname for Nigeria, included local pension funds, asset managers and banks.

Last year, the AfDB said it had won approval to issue local currency bonds in more than 15 African countries, such as Cameroon, Gabon and Senegal.


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