A Green Bond in the amount of 200 million South African rands (ZAR) with a maturity date of September 2023 has been issued by the African Development Bank (AfDB). Daiwa Capital Markets Europe arranged the sale of this 6.90% coupon bond to a single Japanese institutional investor, Sony Bank, through a private placement offering, with the proceeds going toward green financing in African countries.
After successful green bond issuances in US dollars (USD), Swedish Krona (SEK), and Australian dollars ( AUD) since the Bank established its Green Bond framework in 2013, this is the first AfDB Green Bond denominated in ZAR.
“With this investment, Sony Bank is pleased to contribute to the achievement of the SDGs, as an ESG responsible investor,” said Gaku Funakoshi, Head of Sony Bank’s Treasury and Investment Department. “Furthermore, Sony Bank will strive to contribute to the development of sustainable society in accordance with Sony Financial Group’s ESG investment policies.”
To aid African countries in their transition to green growth, the proceeds from this transaction will be used to finance qualified green projects in line with the African Development Bank’s Green Bond Program. The money raised from the green bonds will be used to protect Africa’s water supply, which is one of the continent’s most vulnerable industries to the effects of climate change, as well as to develop ecosystems and encourage the efficient and sustainable use of natural resources.
To quote Keith Werner, the African Development Bank’s Division Manager of Capital Markets and Financial Operations: “We are very pleased with the successful issuance of our inaugural Green Bond in a private placement format in the South African rand market and recognize Sony Bank’s role in helping the Bank to broaden and diversify its investor base in support of our aim to foster green growth by financing eligible climate change projects and working towards achieving the continent’s SD goals.”
The Bank’s Ten-Year Strategy aims to promote sustainable development in Africa through two main tenets: inclusive growth and the transition to green growth. The Bank has helped improve people’s lives in Africa by expanding the availability of clean water, renewable energy, and nutritious food; facilitating the responsible management of the continent’s natural resources; and stimulating technological advancement, job creation, and economic expansion.
Sophie Caillebotte, Daiwa Capital Markets Europe’s Head of Debt Capital Markets: After several months of patient monitoring from all parties to match the investor’s yield target, “Daiwa is delighted to have assisted in arranging this inaugural Green ZAR Private Placement for AfDB and Sony Bank. In addition to providing a natural ZAR issuer, the AfDB also provides an ESG profile through their Green, Social bond frameworks or one of their “High 5s,” and they retain proceeds in the currency even for small amounts.
Sony Bank has set ESG investment goals in this currency and is a committed investor. We’re happy that the two parties were able to find common ground, and this transaction validates the value of the issuer’s and investor’s longstanding relationship, which began at a meeting in Tokyo.