By Modupe Gbadeyanka
The sum of $1 billion has been secured by the African Development Bank (AfDB) to enable investment in infrastructure development across Africa.
A statement issued by the continental lender disclosed that the money was obtained in partnership with its partners in the multi-level securitisation, which are the European Commission, Mariner Investment Group, LLC, Africa50 and Mizuho International Plc.
The portfolio tagged Room2Run is $1 billion synthetic securitisation corresponding to a portfolio of seasoned pan-African credit risk.
The Room2Run is the first-ever portfolio synthetic securitisation between a multi-lateral development bank and private sector investors, pioneering the use of securitisation and credit risk transfer technology to a new and previously unexplored segment of the financial markets.
Structured as a synthetic securitisation by Mizuho International, Room2Run transfers the multi-level credit risk on a portfolio of approximately 50 loans from among the AfDB’s non-sovereign lending book, including power, transportation, financial sector and manufacturing assets.
The portfolio spans the continent with exposure to borrowers in North Africa, West Africa, Central Africa, East Africa and Southern Africa.
“Room2Run gives us fresh resources to invest in the projects Africans need most. Africa has the most promise, the greatest natural resources and the world’s youngest population. But we also have the world’s most persistent infrastructure deficits.
“The African Development Bank has the strategy to address these infrastructure finance gaps and Room2Run gives us the capacity to make it happen,” President of AfDB Group, Mr Akinwumi Adesina, commented.
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