Shelter Afrique Development Bank is seeking to raise 60 billion CFA francs ($100 million) through its first sustainable bond, tapping West African capital markets to finance affordable housing and reduce currency risks for property developers.
The pan-African development bank will issue the bond in two tranches, with a five-year portion carrying a 6.10% coupon and a seven-year tranche at 6.30%, according to a statement issued Monday. The subscription period runs from Oct. 7 to Oct. 30.
The transaction is being arranged by CGF Bourse Dakar, with the International Finance Corp. and Ecobank Group, through Ecobank Senegal, serving as anchor investors.
The fundraising comes as the West African Economic and Monetary Union faces a housing shortfall of about 3.5 million units, with roughly 250,000 additional homes needed each year to keep pace with population growth and urbanization, according to estimates cited by the bank from the World Bank Group.
Shelter Afrique plans to direct the proceeds toward affordable, sustainable and energy-efficient housing projects, while lending in local currency to better match project revenues and reduce borrowers’ exposure to foreign-exchange risk.
“By aligning the financing currency with project revenues,” the bank said, the approach can help reduce currency risk, which is particularly important for medium- and long-term real-estate investments.
The issuance also marks a step in Shelter Afrique’s broader transformation into a pan-African multilateral development bank. The institution says it is seeking to diversify its funding sources, deepen access to African capital markets and mobilize more resources from international partners as it expands its operations across its 44 shareholder countries.
The bond was developed under a Sustainable Financing Framework prepared with the Global Green Growth Institute. S&P Global issued a favorable opinion on the framework, while the transaction has received regulatory approval from the Autorité des Marchés Financiers de l’UMOA.
The deal also comes as African policymakers and financial institutions seek to channel more of the continent’s domestic savings into development projects, reducing reliance on external financing.
Shelter Afrique said the issuance supports the New African Financial Architecture for Development, as outlined in the Abidjan Consensus, which seeks to strengthen African savings and capital markets as a complement to international funding, particularly for housing, urban infrastructure and sustainable development.
The bank has previously raised funds through African capital markets, completing 11 bond issuances across the continent. Its most recent transaction was a 46 billion naira, or about $110 million, bond issued in Nigeria in April 2022.
The latest issuance represents a renewed push to mobilize African capital for one of the continent’s most persistent development challenges, while expanding the role of local-currency financing in long-term housing investment.
