Sovereign guaranteed loans for public sector

A loan qualified as a Sovereign Guaranteed Loan if made to a Regional Member Country or if it is supported by the full faith and credit of the Member Country in whose territory the Borrower is domiciled, or in the case of loans to multinational institutions if it is guaranteed by a Member Country or by Member Countries in whose territory (ies) the Borrower shall execute the project.

Eligible Countries

Eligible countries for Public Sector Sovereign Guaranteed Loans are regional member countries (RMC) classified either as AfDB countries or Blend countries. As of 1 January 2012, Blend countries include: Nigeria; ADB countries  include: Morocco, Algeria, Tunisia, Libya, Egypt, Cape Verde, Gabon, Equatorial Guinea, Angola, Namibia, Botswana, South Africa, Swaziland, Mauritius, Seychelles.

Terms and conditions

On May 10, 2010, the Board of Directors of the Bank approved a revision of loan pricing for sovereign and sovereign-guaranteed operations effective January 1, 2011. This revision relates to the followings:

  • Upward adjustment of the contractual spread from 40 to 60 basis points for new commitments;
  • Introduction of a graduated commitment fee ranging from 25 to 75 basis points, applicable only to undisbursed amounts of fast disbursing policy based loans after the negotiated drawdown timetable;
  • Periodic revision of the contractual spread, within the framework of the Medium-Term Financial Outlook of the Bank, in order to assess whether the contractual spread provides for adequate coverage of the Bank’s operational expenses; and
  • Management shall submit to the Board for consideration, requests for upward adjustment of the price of loans in response to exceptional unforeseen stress events. The Board shall approve inter alia the qualification of an event as exceptional, the related level of pricing adjustment and the application period.
  • Financial products offered by the AfDB: This brochure presents the general terms and conditions of the African Development Bank financial products.