IFC Plans More Than $1 Billion in Local Currency Bonds Over 10 Years to Support African Markets

IFC, a member of the World Bank Group, has obtained approval from Ghana and the eight member countries of the West African Monetary Union to establish local currency bond programs to strengthen domestic capital markets and support private sector development in the region.

The approvals enable IFC to issue over $1 billion equivalent in bonds in Ghanaian cedis and CFA francs over the next ten years. The bonds will be sold in their respective markets to domestic and foreign institutional investors. IFC bonds are rated Triple-A by Moody’s Investors Service and Standard & Poor’s. Proceeds from the bonds will fund IFC projects that support private sector development in key areas such as infrastructure and access to finance for small and medium enterprises. IFC will also work with local institutions to help ensure that local capital market regulations meet international standards. 

“IFC is committed to extending its presence in Africa as a leader among financial institutions. Investors increasingly need effective local capital markets to undertake projects that are critical to the region’s long-term growth and help create economic opportunities for Africans,” said Thierry Tanoh, IFC Vice President for Latin America and the Caribbean, Sub-Saharan Africa, and Western Europe.

“Local-currency financing is a cornerstone of IFC’s strategy in emerging capital markets,” said Jingdong Hua, IFC VP and Treasurer. “Deep and liquid local currency bond markets are indispensible in providing diversified long term funding sources for private sector companies, including SMEs. The agreements with the government and regulator of Ghana and the West African CFA countries will enable us to support the development of these markets. They also allow us to help our private sector clients mitigate foreign-exchange risk, so that they can grow their businesses and contribute to job creation and growth in Africa.”

IFC regularly raises resources by issuing bonds denominated in the local currency of various countries for sale in those jurisdictions (domestic issues) or in other jurisdictions (Euromarket or offshore issues). To date, IFC has borrowed in over 40 currencies. A number of these are emerging-market currencies, and IFC has often been among the first issuer to borrow in these markets.

In Africa, IFC has issued local currency bonds in the west and central CFA zone. IFC has also gained approval for a local currency bond issue in Kenya, and is working with the authorities in Nigeria on a similar approval.

Source: CSR Africa.Net – 19 Jan 2012