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2. Through these Windows, the Bank Group Addresses the Diverse Needs of African Countries. African Development BankMarket-based lending termsAfrican Development FundGrantsConcessional loans, up to 50 years maturity including 10-year grace period Service charge of 0.75% per annum and commitmen
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3. 3 To conclude, the reforms introduced since 1996 are continuing to bear fruit.
At last year’s presentation, as you may recall, I had reported that the Bank Group is in robust health. I am now pleased to report that the year 2002 has seen exceptionally strong performance by the Bank Group on all parameters, thereby further consolidating the gains made.
However, we cannot afford to be, and will not be, complacent.
We at the Bank Group would like to take this opportunity to rededicate ourselves to making every effort to facilitate the achievement of the Millennium Development Goals.
The solid financial position and strong membership support reinforces the Bank Group’s capacity in providing effective development assistance to its borrowing member countries and in ensuring that it remains the leading development finance institution tackling the development challenge facing Africa.
I thank you for your kind attention.
To conclude, the reforms introduced since 1996 are continuing to bear fruit.
At last year’s presentation, as you may recall, I had reported that the Bank Group is in robust health. I am now pleased to report that the year 2002 has seen exceptionally strong performance by the Bank Group on all parameters, thereby further consolidating the gains made.
However, we cannot afford to be, and will not be, complacent.
We at the Bank Group would like to take this opportunity to rededicate ourselves to making every effort to facilitate the achievement of the Millennium Development Goals.
The solid financial position and strong membership support reinforces the Bank Group’s capacity in providing effective development assistance to its borrowing member countries and in ensuring that it remains the leading development finance institution tackling the development challenge facing Africa.
I thank you for your kind attention.
4. 4 Financial Products Classified into Four Main Groups Loan products
Risk management products
Guarantees
Equity participation or quasi-equity
Introduced for Flexibility of RMCs
5. 5 Loan Products Selection of currencies
US$, €, Yen & ZAR
Selection of interest rate bases
Floating
6-month LIBOR, EURIBOR, JIBAR
Fixed
Amortizing swap, computed from market rates
Choices of rate fixing dates
Each disbursement
Bank floating rate reset dates
Final disbursement
Dates decided by borrower
Variable
Weighted average cost of funding pool in that currency
6. 6 Loan Pricing Pricing Methodology
Lending Rate = Base Rate + Lending Spread
Fees
7. 7 Non-sovereign Guaranteed Loan Pricing
8. 8 Lending in Local Currencies Framework recently approved
Rationale
Revenues denominated primarily in local currency
Eliminate foreign currency risk
Contribute to reducing financial sector and overall economic risk exposure (FX and maturity risk for borrowers and financial institutions)
Issues
Loans - limited to financing local expenditures (Article 16 restriction)
Ability to raise local currency resources
Bond issues
Swaps
Guarantees
Risk Management
Asset – liability management
Warehousing & cost of carry
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10. 10 Risk Management Products Available Cap, Floor and Collar
Fee: 12.5 basis points on total amount hedged
Interest Rate Swap
Fee: 12.5 basis points on total amount hedged
Currency Swap
Fee: 25 basis points on total amount hedged
Commodity linked hedge
Fee: 37.5 basis points on total amount hedged
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14. 14 ADF Currency Choice Borrowers can select disbursement currency
Condition: effective for new loans negotiated after 23 June 2005
Currencies available: EUR, USD, JPY & GBP (currencies of SDR basket)
Choice: at loan signature
Loan remains denominated in Unit of Account (UA)
Repayment: in currency disbursed
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