African Development Bank completes roadshow for insurers in 2023 to accelerate private capital mobilization to the continent | African Development Bank

The African Development Bank Group’s Co-Financing, Syndications and Client Solutions division has met with London-based insurers to drive continued support for the bank’s balance sheet optimization and mobilization ambitions, in line with its 2023 lending program.

The Bank held an investor relations event on February 28, which was attended by representatives from more than 30 insurance companies from London, Bermuda and other international markets, including many Lloyd’s Syndicates. The meeting took place in London on the sidelines of the upcoming ExCred International conference.

The Texel Group, one of the Bank Group’s largest brokers, hosted the event and continued its support for the sustainable development finance goals of multilateral development banks.

The interactive session was an opportunity for insurance market practitioners to learn more about the Bank Group and its mobilization plans for 2023 and beyond. In a presentation, Max Ndiaye, acting director of the Co-Financing, Syndications and Client Solutions division, highlighted the evolution of the bank’s risk transfer business and the importance of preferred creditor status in the asset quality of the bank’s government loan portfolio. He also spoke about the formation and approval process of new transactions.

The Bank reinforced the benefits of its preferred credit status with respect to pricing and elaborated on the lack of government defaults on the Bank’s loans or credit-enhanced facilities.

Simon Bessant, Global Head of Insurance at The Texel Group said: “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 force them to take on projects where they would normally not be involved. able to accommodate at a price palatable to AfDB borrowers.

“This year is particularly exciting as we increasingly explore multi-instrument approaches with insurers through syndication and underwriting to support government bonds in line with their newly adopted ESG frameworks,” said Nana Spio-Gabrah, acting manager of the Client Solutions Division.

The G20 Capital Adequacy Framework report notes that greater mobilization of private capital is critical to achieving the UN Sustainable Development Goals and Agenda 2063. The report’s recommendations include scaling up the transfer of risks embedded in multilateral development bank loan portfolios to private sector counterparties. That is why the Bank continues its engagement with asset managers and institutional investors to innovate new risk-sharing structures.

The African Development Bank has already concluded many balance sheet optimization and risk-sharing structures with pools of private capital and/or unfunded credit protection providers, but recognizes that regular dialogue will help strengthen its partnerships in this area. Examples of transactions following the success of the bank’s innovative Room to Run (R2R) initiative include the closing of Room 2 Run Sovereign in October 2022, with the participation of Axa, Axis and HDI Specialty.

The door has since widened to mobilize more institutional investors to maximize the benefits of the bank’s signature GCI-7 capitalization and further leverage the bank’s capital.