Types of Financial Instruments

The African Development Bank continues to adjust its operations by adapting existing instruments and adopting new instruments, when necessary, to manage risk and to assure efficient delivery of services to the changing needs of its clients in emerging markets, inter alia, the following financial products:

  • Senior Debt:
    • Up to 20 years (five years’ grace period).
    • Foreign or local currencies, risk priced.
  • Guarantees:
    • Partial risk, partial credit (long tenors).
    • For specific credits or commercial bank SME programs, risk priced.
  • Subordinated Debt:
    • Subordinated loans or bonds.
    • Local currency possible, maximum 15 years (10+5), risk priced.
  • Equity:
    • Direct investments in banks, development financial institutions (DFIs), micro-finance institutions, etc.
    • Up to 25 per cent with or without Board seat, planned exit, commercial returns.
  • Technical Assistance:
    • Grants for studies.
    • Up to US $1 million for institutional capacity building programs.

Did you know

In 2016, total Bank approvals for private sector operations amounted to UA 1.93 billion, 24 percent higher than in 2015. The interventions in 2016 — co-financing, syndication, and strategic partnerships—have strengthened its capacity to leverage and crowd-in third-party investors. They also lifted the ratio of private co-financing to Bank financing to 6:1, against the target of 5:1.