ALCB Fund Launches EUR 150 million EMTN Programme with EUR 25 million Investment by DEG

London, 10 May 2024 - The ALCB Fund has launched its EUR 150 million European Medium-Term Note (EMTN) programme, with the German development finance institution DEG providing a 5-year initial anchor investment of EUR 25 million.

The EMTN programme is part of the ALCB Fund’s approach to increase private-capital mobilisation; crowding-in European institutional investors and providing exposure to African debt capital markets. This follows the Fund’s redomiciliation to Luxembourg in April 2023, and a credit rating upgrade to Baa1 (Stable) by Moody’s in June 2023. ALCB Fund is managed by Cygnum Capital.

The wider EMTN is expected to be utilised over the coming years, issuing multiple tranches under standardised documentation. The programme structure enables the Fund to issue sustainable or vanilla notes. It is also multi-currency, allowing issuances in EUR, USD or any African local currency (with USD/EUR settlement).Notes are cleared through Euroclear and/or Clearstream and can optionally be listed on the Freiverkehr Open Market in Germany.

“We are delighted to be an anchor investor in the ALCB Fund’s debut bond issuance, ”said Michael Fischer, Director Financial Institutions Debt Africa at DEG. “The development of domestic local currency capital markets is a key pillar in creating a healthy and stable financial ecosystem on the African continent; providing an opportunity for domestic savers (e.g. pension funds) to support in local economic development, and helping companies reduce their FX risk. The approach used by the ALCB Fund to developing this market aligns closely with DEG’s objectives, by investing in economically-inclusive sectors such as MSME finance, affordable housing, renewable energy and agriculture.”

Brock Hoback. Fund Lead of the ALCB Fund at Cygnum Capital, said: “Implementing a private-capital mobilisation strategy is a medium-term objective for the ALCB Fund. This is why we have established this EMTN programme, to help crowd-in European institutional investors. This is in addition to the recently announced guarantee facility from the European Fund for Sustainable Development Plus (EFSD+) which will further support to raise funding from African banks and institutional investors. Over the next 12 to 18 months we expect to see a significant rise in institutional funding to the ALCB Fund; a result of our 10-year track record of successfully investing across the African continent. We are grateful to DEG in their role as acting as a catalyst for the establishment of this EMTN programme.”

ALCB Fund: The ALCB Fund was founded by KFW in 2012 on behalf of the German Ministry for Economic Cooperation and Development (BMZ). The Fund’s mission is to support the development of African capital markets by promoting primary corporate bond issuances in local currency. This is achieved by supporting African issuers, investors and intermediaries by acting as an anchor investor and providing technical assistance. Learn more: www.alcbfund.com

DEG: For more than 60 years, DEG has been financing and advising private enterprises operating in developing and emerging-market countries. With a portfolio of around EUR 10.3 billion we’re one of the largest private-sector development financiers. As an impact and climate investor we accompany companies that are addressing transformation and aiming to seize their opportunities. Our customers not only receive financing and advisory solutions tailored to their needs: they can build on our market knowledge, our impact and climate expertise and our international network. In this way, DEG, a subsidiary of KfW, contributes to creating more skilled jobs and local income and to improving value creation on the ground in line with the SDGs. Learn more: www.deginvest.de

Cygnum Capital Group: Cygnum Capital Group is an investment bank and asset manager operating across frontier and emerging markets. Formerly known as Lion’s Head, which was founded in 2008,Cygnum Capital is now a global provider of tailored and innovative financial solutions to meet its clients’ diverse needs. Learn more: www.cygnumcapital.com