African Development Bank (AFDB) has launched a $3 billion “Fight COVID-19” Social Bond, the largest USD social bond transaction ever recorded in the capital market.
The Fight COVID-19 Social bond, which is expected to mature in three years, has raised funds that will be channelled into alleviating the economic and social impact of the Coronavirus on the African continent.
The record-breaking bond attracted bids exceeding $4.6 billion, with strong interest from the central banks, financial institutions, investors and assets managers.
According to the official statement from the bank, it is “the largest dollar-denominated Social Bond ever launched in international capital markets to date, and the largest US Dollar benchmark ever issued by the Bank. It will pay an interest rate of 0.75%”.
Dr Akinwumi Adesina, President of the AfDB Group said that the bank was moving towards providing flexible responses to help the African economy recover from the 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. This $3 billion Covid-19 bond issuance is the first part of our comprehensive response that will soon be announced.
“This is indeed the largest dollar social bond transaction to date in capital markets. We are here for Africa, and we will provide significant rapid support for countries,” Adesina said.
Tanguy Claquin, Head of Sustainable Banking, Crédit Agricole CIB stated that record-breaking bonds would turn around the economic downturn.
Claquin said that the bank was living up to its responsibilities of helping the African economy, by helping Africans access health and other financial goods and services. He noted that even though the virus was slow to get to South Africa, it was already placing pressure on the health systems.
According to him, factories had been closed and some workers laid off, travel restrictions had been placed and supply chains disrupted – a situation that could drive the continent into recession if nothing was done.
Speaking about the bond, Treasurer, African Development Bank, Hassatou Diop N’Sele noted that the bank’s move will greatly lessen the economic impact of the pandemic on Africa.
“We are thankful for the exceptional level of interest the Fight Covid-19 Social Bond has raised across the world, as the African Development Bank moves towards lessening the social and economic impact of the pandemic on a continent already severely constrained.
“Our Social bond program enables us to highlight our strong development mandate to the investor community, allowing them to play a part in improving the lives of the people of Africa,” she said.
George Sager, Executive Director, SSA Syndicate, Goldman Sachs said that the transaction was a remarkable outcome “both in terms of its purpose but also in terms of a USD financing”, and commended the bank for bracing the capital markets at an uncertain time like this.
The Fight COVID-19 funds have been allocated to beneficiary institutions.
Central banks and official institutions get 53%, bank treasuries receive 27% and asset managers get 20%.
Final bond distribution statistics were as follows: Europe (37%), Americas (36%), Asia (17%) Africa (8%,) and Middle-East (1%).
The bank established its Social Bond framework in 2017 and raised the equivalent of $2 billion through issuances denominated in Euro and Norwegian krone. In 2018 the Bank was designated by financial markets, ‘Second most impressive social or sustainability bond issuer” at the Global Capital SRI Awards.
NNPC opens bid for repairs of pipelines and depots on a finance and operate basis
The project is expected to be operated on a public-private partnership basis.
The Nigerian National Petroleum Corporation (NNPC) declared open on Tuesday, August 11, bids by interested private investors to repair the pipelines and depots that are serving the refineries.
These pipelines, built almost 4 decades ago, are very critical in the successful movement of crude oil to the country’s 3 refinery complexes located in Port Harcourt, Kaduna and Warri, and the subsequent movement of the finished petroleum products to the consumers.
The pipelines, which according to NNPC are in dire need of comprehensive repairs, have experienced years of incessant theft and vandalism as well as ageing.
This project is expected to be operated on a public-private partnership basis as the bidders are expected to finance and execute the project, then operate for an agreed number of years before transferring back to the NNPC. In other words, the bidders for the extensive repairs of these pipelines would have to finance them independently and operate for a defined period in order to recover their investment costs with throughput tariffs.
It must be noted that this model is similar to the one that had been in place by the state oil giant for the refineries. The NNPC had also announced plans to get private investors to invest in the repair of the 3 refineries on a repair and operate basis, as they do not want to be involved in the management of these refineries.
The NNPC Group Managing Director, Mele Kyari, had said that the ultimate plan for these refineries was to allow it to run on the LNG model, where the shareholders would be free to decide on the fate of these refineries going forward.
The refineries, which have only run sporadically, were shut down by NNPC earlier this year while awaiting repairs and upgrade. These 2 projects are expected to be handled separately according to information made available on Tuesday.
In addition, the new pipelines would need intrusion detection systems, as well as deep burial, to stop theft or vandalism. The deadline for the submission of these bids is due by September 18.
WTO Job: Okonjo-Iweala reveals how to resolve the rift between US and China
Mrs Iweala revealed how she hopes to resolve the rift between the United States of America and China.
As the jostle for the top job at the World Trade Organization (WTO) becomes more intense, the Nigerian candidate, Ngozi Okonjo-Iweala, has disclosed some of her plans for the institution. The former Nigerian Finance Minister recently had an exclusive interview with CNBC Africa.
Speaking during the interview, Mrs Iweala revealed how she hopes to resolve the rift between the United States of America and China, the 2 biggest economies in the world, especially as regards trade issues. She also noted that part of her vision is to build a trade institution where there is greater trust among its members. She also stressed that the WTO, at this critical time, is needed to ensure that trade and global markets remain open.
On healing the rift between the US and China, Okonjo-Iweala admitted that it is going to be challenging and not be easy. She said:
“Well this is not going to be easy, if it was easy, it could have been done a long time since. So it would be very challenging but it is not an impossible job. It is very clear that both the US and China have been helped and benefitted from the multilateral trading system in the past. Hundreds of millions have been lifted out of poverty. They have experienced shared prosperity in the economies and their countries.’’
The Nigerian candidate pointed out that it is important to remind the US and China of this shared prosperity. She then disclosed that she would listen to both countries to find out what really are the issues causing distrust among them. She said that she will not want to be involved in the larger political problems, but will rather separate the trade issues and focus on them and build this trust.
Going further on how to settle their rift, Okonjo-Iweala said, “You need to begin to find areas where there can be confidence-building and trade. Building trust is not talking about it, you have to have areas where both can work together and agree and we have a golden opportunity in the fisheries subsidies negotiations that are going on now because the US is a party to it, China is a party, the EU, all other members.’’
“It is a multilateral negotiation, so if they can sit around the table with others to negotiate this and have a successful outcome, that is one thing that will be shared in common between the 2. So that will begin to build confidence. Then reaching out both in the US and in China to talk to the policymakers, go where the decisions are made, talk to congress also in the US and begin to show the benefits of the system again.’’
She also said they will look at reasons why they need to work together because their rift may be causing negative externalities for other members. She is of the opinion that exposing all of these, working with them, and listening carefully will begin to build confidence.
She believes that while achieving this will be difficult, focusing seriously on trade issues can create room for a breakthrough.
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US hands over 200 ventilators to Nigeria
The US Ambassador to Nigeria said USAID and Nigeria will work very closely over the next couple of weeks.
The United States of America, on Tuesday, August 11th, handed over some 200 ventilators to the Federal Government of Nigeria. This was disclosed by the Federal Ministry of Health via its Twitter handle, following the handover ceremony in Abuja.
The US Ambassador to Nigeria, Ambassador Mary Beth Leonard, at the handover event, explained that the ventilators are compact & portable & can be easily mobilized to reach those patients with the most severe symptoms of COVID-19.
The US Ambassador to #Nigeria Her Excellency Ambassador Mary Beth Leonard at the handover event stated that "the 200 ventilators being transferred today are compact & portable & can be easily mobilized to reach those patients with the most severe symptoms of #COVID19". pic.twitter.com/4nSgYVoEHk
— Federal Ministry of Health, NIGERIA (@Fmohnigeria) August 11, 2020
Speaking during the handover ceremony, the Ambassador said, “Their arrival fulfills the commitment discussed between US and President Muhammadu Buhari earlier this year. Our support includes; training on the use & maintenance of this equipment, ensuring that the ventilators can address other respiratory illnesses in the years beyond.”
According to her, the United States Agency for International Development (USAID) and Nigeria will work very closely and energetically over the next couple of weeks, with the Presidential Taskforce on COVID-19, to bring these ventilators across each of Nigeria’s states & the Federal Capital Territory.
“The United States has been pivotal in supporting Nigeria’s membership in the ‘Every Breath Counts’ Coalition. Nigeria is now one of 2 countries in Africa to have an “oxygen roadmap” that seeks to fight against pneumonia, hypoxemia, & now COVID-19,” she stated. She then added that as the U.S. Ambassador to Nigeria, she remains proud of the strong friendship between the two countries.
The Backstory: Last April, Nairametrics had reported when the Minister of Information, Lai Mohammed, said that “President Donald Trump assured that the United States stands in solidarity with Nigeria in this difficult time and promised to send ventilators to support the country in its fight against the pandemic.”