Multinational - Regional African Domestic Bond Fund (ADBF) technical assistance


Project Summary

Approval Date 05 Feb 2010
Signature Date 15 Dec 2010
Planned Completion Date 30 Jun 2017
Last Disbursement Planned Date 31 Dec 2017
Sovereign / Non-Sovereign Sovereign
Sector Multi-Sector
DAC Sector Code 15124
Commitment U.A 707,925.17
Status Completion

Project General Description

The project consist of to put in place the structure for a long-term relationship among financial market stakeholders in Africa. The AfDB seeks to contribute to the development of sound domestic debt markets in Africa through the creation of the African Domestic Bond Fund (ADBF). The ADBF will be invested in local currency denominated sovereign and sovereign guaranteed sub-national bonds. In order for the investments to be defined as foreign reserves according to the definition of the International Monetary Fund (IMF), the ADBF will be funded by African Central Banks. The management of the Fund will be conducted by a reputable international asset manager. The Bank of International Settlements (BIS) will act as an administrator.Through the ADBF, the Bank has a unique opportunity to break new ground and be in promoting the development of African domestic bond markets. At present no other African institution offers a fund solely dedicated to investing in local currency denominated debt. The proposed ADBF project will be organized into the following four components: (i) The ADBF Feasibility Study; (ii) Construction of the African Domestic Bond Index (ADBI); (iii) Pan-African workshop and creation of mutli-disciplinary working groups; (iv) The creation and launch of the ADBF.

Project Objectives

The objective of this project is to create a bond fund that will invest in local currency denominated debt in Africa. This will enable the Bank to further build on its expertise as an issuer and lender in local currency, to become the focal point for African domestic bond markets.

Beneficiaries

The project's main beneficiaries are RECs, Central Banks, DMOs/MoFs, Private sector and AfDB. The ADBF will seek to empower RECs as the focal points for the establishment of the regional multi-disciplinary working groups. It is also envisaged that Central Banks (as administrators of government debt) and DMOs/MoFs as issuers and policy makers will benefit from the capacity building funded through the multi-disciplinary working groups. Private sector market participants will be provided with a platform to engage fully with legislators and policy makers to remove restrictions to bond market development and provide constructive feedback on new legislation and implemented policies. Lastly, the ADBF will provide the Bank with an opportunity to play a coordinating role between stakeholders and donors, through the creation of the regional multi-disciplinary working groups.

Participating Organization

Funding
Fund for African Private Sector Assistance
Implementing
African Development Bank (ADB)

Information

IATI identifier 46002-P-Z1-KF0-012
Last Update 05 Dec 2020

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Contact Details

Email fapa@afdb.org

Geographic Location

Country Multinational