Ecobank has achieved a major milestone for African finance with the listing of its US$450 million Sustainable Agriculture & Natural Capital Bond on the London Stock Exchange. The bank marked the occasion with a Market Open Ceremony, calling the transaction a breakthrough for sustainable investing on the continent.

The bond is the first of its kind - a commercial bank-issued Nature Bond formally designated by the International Capital Market Association (ICMA). It also the first use-of-proceeds green bond globally to earn ICMA's secondary Nature Bond label.

Unlike a conventional bond, a use-of-proceeds (UoP) green bond is a bond in which the money raised from investors is earmarked exclusively for financing or refinancing environmentally beneficial projects.

The funds raised will be used to finance projects in sustainable agriculture, natural capital and water infrastructure across 24 African markets where Ecobank operates, lending focusing on sustainable primary production, sustainable agri-processing and  water supply and sanitation.

The bank says the financing will prioritize countries that are critical for biodiversity and nature conservation, while helping to strengthen Africa's food systems, supply chains and water security.

Strong investor interest

In a Press Release, Ecobank indicated that investor demand for the bond significantly exceeded expectations. Ecobank initially targeted to raise US$350 million. However, after attracting orders worth more than US$1.36 billion, nearly four times the original offer, the Bank increased the size to US$450 million.

According to Ecobank, the strong demand also enabled the bank to reduce its borrowing cost by 50 basis points from its initial pricing guidance.

Credit rating agency Moody's awarded the bond its highest Sustainability Quality Score of SQS1 (Excellent).

Global participation

The bond attracted investors from several regions.

About 55% of allocations went to investors in the UK and Europe, while 38% were allocated to African investors. The Middle East accounted for 3%, with the United States and Asia each taking 2%.

Among the investors was FMO, the Dutch entrepreneurial development bank, which participated as the anchor investor.

The bond has been structured as a Tier 2 capital instrument with a maturity of 10.25 years and is callable after 5.25 years.

London Stock Exchange ceremony

Senior executives from Ecobank, led by Board Chairman Papa Madiaw Ndiaye, attended the Market Open Ceremony at the London Stock Exchange to commemorate the listing.

The delegation also included Group Chief Executive Officer Jeremy Awori, Group Executive Director and Chief Financial Officer Ayo Adepoju, and Group Head of Sustainability Rachael A.O. Antwi.

Ecobank acted as the issuer, originator and sole sustainability structuring adviser for the transaction, while Standard Chartered Bank and Renaissance Capital Africa served as joint lead managers and joint bookrunners.

The listing is being seen as an important milestone for African sustainable finance, highlighting the growing role of African financial institutions in mobilising international capital for investments in climate resilience, biodiversity conservation and sustainable development.