BADEA approves $120m to support Shelter Afrique Dev't Bank capitalisation

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Shelter Afrique Development Bank (ShafDB) has announced the signing of a strategic agreement with the Arab Bank for Economic Development in Africa (BADEA) to support its transformative capital increase initiative.

Relatedly, BADEA yesterday approved a landmark $120m to support the capitalisation program of Shelter Afrique Development Bank, the leading Pan-African institution focused on affordable housing and urban development.

This initiative, developed in partnership with the Arab Bank for Economic Development in Africa (BADEA), introduces an innovative financing mechanism through which eligible member states can access on-lending at competitive terms.

The BADEA-supported facility, totaling $120m, will be used to settle and boost member states’ capital subscriptions to Shelter Afrique Development Bank (ShafDB).

“This agreement with BADEA marks a critical step in strengthening our capital base and advancing our mission of financing affordable housing and sustainable urban infrastructure across Africa. We are grateful to BADEA for its strong partnership and unwavering support in this pivotal phase of our institutional evolution,” Thierno Habib-Hann, Managing Director of Shelter Afrique Development Bank noted.

The new capital increase program includes an initial equal allocation to all member states, followed by a phased reallocation, first on a pro-rata basis, and then on a first-come, first-served basis. This approach aims to encourage active participation by member states and to strengthen ShafDB’s capital adequacy in a balanced and transparent manner.

“We see this capital program as a strategic milestone in Shelter Afrique Development Bank’s evolution. BADEA is proud to back this initiative, and we remain committed to our shared mission of enabling access to decent housing and inclusive urban development across Africa,” President of BADEA H.E. Abdullah stated.

The need to enhance equity capital has become critical following the institution’s transformation into a Development Bank, a milestone formally approved by Shelter Afrique’s shareholders during the Extraordinary General Meeting (EGM) held in Algiers, Algeria, in October 2023.

Building on this transformation, a significant achievement was realised during the Annual General Meeting in June 2024 in Kigali, Rwanda, where shareholders demonstrated strong leadership by endorsing a transformative capital increase program, and the board approved in December 2024 a capital increase of over $200 million.

Increased leverage

The capital increase program has been designed to significantly strengthen ShafDB's balance sheet over the medium term, expand its shareholder capital base, and significantly mobilise debts. The capital raised will also support the Bank’s plans to attain investment-grade credit ratings, attract new institutional investors, and expand its lending and technical assistance programs in member countries.