Shelter Afrique Development Bank Signs Strategic Agreement with Arab Bank for Economic Development in Africa (BADEA) to Support Transformative Capital Increase Initiative
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.
In this regard, BADEA has approved a historic amount of $120 million to support ShafDB's capitalization program, the largest pan-African institution focused on affordable housing and urban development. The concessional financing facility will enable eligible member states to settle and increase their capital subscriptions to ShafDB.
This initiative, developed in partnership with BADEA, introduces an innovative financing mechanism through which eligible member states can access loans at competitive conditions. The $120 million facility supported by BADEA will be used to settle and increase capital subscriptions to ShafDB by member states.
"This agreement with BADEA marks a crucial step in strengthening our capital base and advancing our mission of financing affordable housing and sustainable urban infrastructure across Africa," said Thierno Habib-Hann, Managing Director of Shelter Afrique Development Bank. "We are grateful to BADEA for their solid partnership and unwavering support during this pivotal phase of our institutional evolution."
The new capital increase program includes an initial allocation equal to all member states, followed by a progressive reallocation, first on a pro-rata basis, and then on a first-come, first-served principle. This approach aims to encourage active participation from member states and strengthen the alignment of ShafDB's capital in a balanced and transparent manner.
Commenting on the program, BADEA President Abdullah Kh Almusaibeeh stated, "We consider this capital program a strategic step in the evolution of Shelter Afrique Development Bank. BADEA is proud to support this initiative, and we remain committed to our shared mission of enabling access to decent housing and inclusive urban development across Africa."
The need to increase capital has become critical following the transformation of the institution into a development bank, a step formally approved by Shelter Afrique's shareholders during an extraordinary general meeting (EGM) held in Algiers, Algeria, in October 2023.
Building on this transformation, significant progress was made during the annual general meeting in June 2024 in Kigali, Rwanda, where shareholders demonstrated strong leadership by approving a transformative capital increase program, and the board of directors approved a capital increase of over $200 million in December 2024.
"The expansion of the capital base will enable the bank to increase financing throughout the housing value chain, access more competitive financing on international and African capital markets, and strengthen its role in addressing the housing deficit and promoting inclusive urban development in its 44 member states," said Hann.
Leveraging the Impact
The capital increase program is designed to significantly strengthen ShafDB's balance sheet in the medium term, broaden its shareholder base, and mobilize significant debt. The raised capital will also support the bank's plans to obtain high-quality credit ratings, attract new institutional investors, and expand its lending and technical assistance programs in member countries.
