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Raising Capital for Africa’s Development Goals

The African Development Bank (AfDB) has launched a $464m five-and-a-half-year ‘kangaroo’ social bond, its first return to Australian fundraising since 2018. A kangaroo bond, sometimes known as a matilda bond, is a foreign bond issued in the Australian market by non-Australian firms denominated in Australian currency. AfDB social bonds raise money for projects that alleviate or mitigate social issues such as improving access to electricity, water and sanitation. The Australian dollar is the fifth currency in which the AfDB has issued social bonds since it established the program in 2017, following deals in euros, US dollars, Norwegian kroner and Swedish kronor. It launched its first Australian bond in 2016. AfDB treasurer Hassatou N’sele said the Covid-19 pandemic had led to a rise in the global issuance of social bonds. “Following on from the ground breaking USD$3.1 bln 3 year ‘Fight Covid-19’ Social Bond we issued in 2020, we’re glad to see that public domestic markets, like the Kangaroo bond market, are now seeing similar development in terms of interest from dedicated ESG investors, which provided additional momentum enabling us to print the largest trade we’ve ever done in AUD”.