AfDB issues first dirham-denominated bond

The African Development Bank (AfDB) has issued its first bond denominated in Moroccan dirhams, raising one billion dirhams, equivalent to about 102 million U.S. dollars. This bond, offered through a private placement to qualified investors, has a seven-year term and features a variable interest rate tied to the Moroccan Overnight Index Average (MONIA), a key reference rate in Morocco’s money market.

AfDB active in capital markets

This follows a series of recent capital-raising activities by the AfDB. Two days earlier, on October 28, it issued a social bond worth two billion Hong Kong dollars (about 255 million U.S. dollars) with a five-year term. This followed a similar issuance of three billion Hong Kong dollars in March. Earlier in October, the bank also raised 2.5 billion U.S. dollars, after issuing one billion euros (1.12 billion U.S. dollars) on October 14.

AfDB has used African currencies before

The use of African currencies for AfDB bonds is not new. As early as 2005, the bank issued a 300 million Botswana pula bond (about 21.7 million U.S. dollars). It later borrowed in Uganda and raised 12.95 billion Nigerian naira in 2014, roughly 80 million U.S. dollars at the time, to fund small businesses and infrastructure. Similar operations continued, including a 200 million South African rand issuance in 2022 and several bonds indexed to currencies like the Ghanaian cedi and Kenyan shilling.

AfDB participates in UEMOA bond market

In the West African Economic and Monetary Union (UEMOA), the AfDB participates in the bond market as an investor. In October 2025, it approved a potential subscription of up to 15 billion CFA francs in a 60 billion CFA franc social bond aimed at funding the Electricity for All program in Côte d'Ivoire.

Moroccan bond opens new opportunities

The AfDB’s use of the Moroccan dirham, which is rated AAA by major international agencies, provides new investment opportunities for local institutional investors. Banks, insurers, and asset managers can now invest in top-tier multilateral bonds denominated in the national currency. However, the AfDB did not disclose the identities or distribution of the bond’s subscribers.

AfDB aims to boost local currency lending

This issuance should help the AfDB develop loans denominated in dirhams. By raising funds directly in the local currency, the bank can finance projects with local revenue streams, reducing reliance on the dollar and euro and mitigating exchange rate risks. The AfDB also plans to build a liquidity portfolio in dirhams, potentially using part of its foreign currency reserves. The choice of Morocco reflects long-standing financial ties, with the bank having invested nearly 15 billion euros in over 150 projects in sectors like transport, energy, and agriculture since 1978.