Shelter Afrique Development Bank (ShafDB) has launched its first sustainable bond, seeking to raise FCFA 60 billion, which is approximately US$100 million or KSH 13 billion, to finance affordable and sustainable housing projects in the West African Economic and Monetary Union (WAEMU), a regional group of eight countries that use the CFA franc.

The bond has two options: a five-year bond offering an annual interest rate of 6.1% and a seven-year bond offering 6.3%, with the subscription period running from 7 to 30 October 2026.

The International Finance Corporation (IFC) and Ecobank Group, through Ecobank Senegal, are the main investors backing the issuance, while CGF Bourse Dakar is serving as the lead arranger.

Addressing West Africa's Housing Shortage

Like many other regions in Africa, West Africa faces a significant housing shortage.

The World Bank estimates that this region's housing deficit is around 3.5 million units, which means about 250,000 additional homes are needed every year to keep up with population growth and urbanisation.

Shelter Afrique says the funds will help finance affordable, sustainable, and energy-efficient housing projects in the region.

An important feature of the bond is that it raises money in local currency, which is very crucial.

This allows housing projects that earn revenue in CFA francs to access financing in the same currency, reducing the risk of exchange rate changes increasing their repayment costs.

A Push for More African Investment in Housing

The bond is part of the Development Bank's wider strategy to expand its funding sources and increase investment in housing and urban development across Africa.

The institution has previously raised money through African capital markets, completing 11 bond issuances across different markets on the continent.

Its most recent issuance was in Nigeria in April 2022, when it raised NGN 46 billion, equivalent to about US$110 million at the time.

For this sustainability issuance, Shelter Afrique has worked with the Global Green Growth Institute (GGGI) to develop its Sustainable Financing Framework.

The framework received a favourable opinion from S&P Global, while the bond also received regulatory approval from the Autorité des Marchés Financiers de l'UMOA (AMF-UMOA).

Shelter Afrique Development Bank is a pan-African multilateral development bank that finances sustainable housing, urban development and related infrastructure across the continent.