African Development Bank concludes 2023 insurer roadshow to mobilize private capital for Africa
In order to mobilize ongoing support for the African Development Bank Group's aspirations for balance sheet optimization and mobilization in line with its 2023 loan program, the Co-Financing, Syndications and Client Solutions division met with insurers based in London.
London, UK | BAZZUP | In order to mobilize ongoing support for the African Development Bank Group’s aspirations for balance sheet optimization and mobilization in line with its 2023 loan program, the Co-Financing, Syndications and Client Solutions division met with insurers based in London.
Representatives from more than 30 insurance companies from the London, Bermuda, and other worldwide markets, including major Lloyd’s Syndicates, attended an investor connection event hosted by the Bank on February 28. On the eve of the impending ExCred International conference, a meeting was held in London.
The event was sponsored by The Texel Group, one of the main brokers for the Bank Group, as part of its ongoing commitment to the objectives of sustainable development finance for multilateral development banks.
Practitioners in the insurance industry had the chance to learn more about the Bank Group and its mobilization goals for 2023 and beyond during the interactive session. The development of the Bank’s risk transfer activities and the significance of the preferred creditor status in the asset quality of the Bank’s sovereign loan book were both highlighted in a presentation by Max Ndiaye, acting director of the department of co-financing, syndications, and client solutions. He also discussed how new deals are created and approved.
The Bank elaborated on the lack of sovereign defaults on the Bank’s loans or credit enhanced facilities and reiterated the advantages of its preferred credit status in terms of pricing.
“It is important for the African Development Bank to deepen its relationship with institutional investors by explaining their origination processes and excellent risk management framework to crowd them in to projects they may not be able to accommodate at a pricing that is palatable to AfDB borrowers,” said Simon Bessant, Global Head of Insurance at The Texel Group.
Nana Spio-Garbrah, acting manager of the client solutions division, said, “This year is particularly exciting because we are increasingly exploring multi-instrument approaches with insurers through syndication and guarantees in support of sovereign borrowings in line with their newly adopted ESG Frameworks.
The UN Sustainable Development Goals and Agenda 2063 can only be achieved with enhanced private capital mobilization, according to the G20 Capital Adequacy Framework Study. The report’s suggestions include stepping up the transfer of risks contained in loan portfolios from multilateral development banks to counterparties in the private sector. In order to develop novel risk sharing mechanisms, the Bank is still working with asset managers and institutional investors.
The African Development Bank has already signed a number of risk-sharing and balance sheet optimization agreements with underfunded credit protection companies and/or private capital pools, but it acknowledges that ongoing communication will deepen its cooperation in this field. Examples of transactions made after the Bank’s ground-breaking “Room to Run” (R2R) project was successful include the completion of Room 2 Run Sovereign in October 2022, which included Axa, Axis, and HDI Specialty as participants.
Since then, the window has been opened wider to encourage more institutional investors to participate in order to fully use the Bank’s historic GCI-7 capitalization.