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AfDB and partners’ innovative Room2Run securitization will be a model for global lenders

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Room2Run, the African Development Bank, AfDB and partners’ innovative US $1 billion synthetic securitization of a portfolio of seasoned African Development Bank private sector loans, will serve as a model for other lenders, help reduce costs, and shorten execution time, finance experts told participants at a workshop on Saturday.

The landmark securitization instrument, a first for any multilateral development bank, has been described by investors as a “strong market fit.” The instrument offers other multilateral development banks and investors a roadmap for innovative financing and new ways to explore the release of much-needed capital to impact financing and catalyze private capital in developing markets.

“This is particulat, asrly importan it opens the door for significant scale in the future, both in Africa and in other continents where your institutions are present and financing development projects,” said Swazi Tshabalala, the Bank’s Vice President of Finance.

About 70 participants from the international finance community – investors, bankers and other financial institutions, attended the workshop entitled “A Look at Optimizing MDB Balance Sheets Through Securitization, “organized by the African Development Bank and the Mariner Investment Group, LLC (Mariner), a key investor in the deal. The participants heard presentations on the structure of the securitization, challenges and lessons learned, followed by a question and answer session.

The workshop took place on the sidelines of the International Monetary Fund and World Bank annual meetings and the 2018 Global Infrastructure Forum in the Indonesian island of Bali. The AfDB’s Chief Risk Officer Tim Turner said the meeting was convened in response to massive interest from sister development institutions following the announcement of Room2Run in September, 2018.

The Bank, the European Commission, Mariner Investment Group, LLC (Mariner), Africa50, and Mizuho International plc announced the pricing of Room2Run on 18 September in Ottawa, Canada – the first-ever portfolio synthetic securitization between a Multilateral Development Bank (MDB) and private sector investors, pioneering the use of securitization and credit risk transfer technology to a new and previously unexplored segment of the financial markets.

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Tshabalala said Room2Run was timely in the light of new regulations in banking that would see more traditional commercial bank lenders scaling back some of their activities in the project finance and trade finance markets. “These regulations will make investments in regions such as Africa more expensive and capital intensive, and this is why we have to find new avenues to crowd-in non-traditional sources of funding, ” Tshabalala said.

Describing Room2Run as the “crown jewel of our impact activity, Andrew Hohns, Lead Portfolio Manager of the IIFC Strategy, Mariner Investment Group, said that there is a common misconception about the performance of MDB’s loans as unattractive; but the risk perceptions were often unbalanced”, he said.

“These assets have performer pretty well,” Hohns, said, giving reasons for Mariner’s global involvement with impact financing – nearly US$14 billion of infrastructure assets covering 1,250 projects world-wide. Hohns said the investor’s decision to partner with the Bank rested on its strong track record. The Bank is by far the most positioned of institutions on the continent to offer this kind of securitization, he said and synthetic securitization deals such as Room2Run were a “strong market fit.”

“The level of interest in taking exposure to the assets within the MDB’s is high,” Hohns said.

Kay Parplies, Head of Unit Investment & Innovative Financing, European Commission, said Room2Run was “catalytic” and hoped its involvement would attract other private investors and rating agencies to refine their approaches to African assets. Parplies said our experience over two decades had shown many in the investor community that actual risks (in African investments) were often lower than the perceived risks.

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Other presenters at the workshop included Juan-Carlos Martorell Co-Head of Structured Products Solutions, Mizuho International and Nicole Giles Director General, International Finance and Development, Finance Canada.

Room2Run Roadmap to be shared with MDB’s

Turner said the Bank would soon publish a detailed journey of the Room2Run initiative, including all the documentation involved in its set up, to encourage other MDB’s to consider adopting synthetic securitization models to free up capital and create new pathways for institutional investors to support development. The document would be a “technical manual” to help others lower the cost and shorten the time to develop similar transactions.

“There is no need for our development partners to redo what we did. This is a knowledge sharing session of learnings from the school of hard knocks,” Turner said.

By creating new pathways between those with savings and those needing capital for development projects, Room 2Run would generate excitement within investment spaces normally far removed from development financing.

“Imagine a pensioner in Toronto knowing that his retirement investments are financing a power plant that was giving electricity to a family in Yopougon (Cote d’Ivoire). It’s a win-win.”, Turner said.

Structured as an impact investment, Room2Run is designed to enable the African Development Bank to increase lending in support of its mission to spur sustainable economic development and social progress.

Synthetic securitization and other similar models are intended to bring together public and private capital to finance development.

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“MDB’s need to look at more than the financial return,” Bank Director of Syndication & Co-Financing, African Development Olivier Weck said, adding that the Bank had itself invested time to educate its board about the deal. “We needed to demonstrate additionality and the development outcome,” Eweck said.

Room2Run, positions the Bank as an innovative leader in providing lending in pursuit of the global development agenda, which prioritizes its own High 5’s and the Sustainable Development Goals. Freed-up capital will be directed toward renewable energy projects in Sub-Saharan Africa, including projects in low income and fragile countries.

“The Bank is treating this (Room2Run) as a pilot project,” Hohns said. “Mariner is very much interested in doing more.”

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NDLEA Arrests Hair Stylist, Dispatch Rider for Allegedly Selling Drug-Laced Chin-Chin to Students in Bayelsa

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The National Drug Law Enforcement Agency (NDLEA) has apprehended a 20-year-old hair stylist, Josephine Odunu, and a 30-year-old dispatch rider, Edesemi Ikporo, for allegedly peddling illicit drug-laced chin-chin to school students and at social gatherings in Yenagoa, Bayelsa State.

NDLEA Spokesperson, Femi Babafemi, stated on Sunday that officers on patrol around the Opolo area of Yenagoa intercepted Edesemi, recovering 200 grams of chin-chin infused with cannabis sativa, intended for delivery to a buyer on Sunday, March 10, 2024.

“A swift follow-up operation led to the arrest of the hairdresser, Josephine, who distributes the drugged chin-chin from the salon where she works in the Kpansia area of Yenagoa,” Babafemi remarked.

He revealed that a search of the salon resulted in the discovery of an additional 3.00 kilograms of the illicit substance, bringing the total weight seized from the duo to 3.2 kilograms.

Investigations uncovered that they frequently distributed the drug-laced chin-chin, often mixed with cannabis and tramadol, to students and at birthday parties.

“While Edesemi handled the delivery to buyers, Josephine served as a major distributor to a wanted suspect involved in the production of the drugged chin-chin,” Babafemi added.

In a related development, NDLEA operatives in Adamawa State apprehended two wanted suspects, Ajim Samuel (aka Boss), 30, and Davidson John Joshua (aka Dantala), 36, on Wednesday, March 13. The suspects were intercepted along the Numan-Jalingo road, carrying 14,428 pills of tramadol concealed in their vehicle, along with 21 grams of cannabis and monetary exhibits totaling N19,280.

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Also, in Osun State, a commercial bus driver, Ogunleye Adegoke, 49, was arrested along the Gbongan-Ibadan road after NDLEA operatives discovered 2,000 capsules of tramadol, 60 tablets of rohypnol, and 10 bottles of codeine syrup concealed in the spare tire compartment of his vehicle.

The NDLEA’s statement highlighted numerous other arrests and seizures across various states, emphasizing the agency’s continued efforts in the War Against Drug Abuse (WADA) advocacy campaign nationwide.

Chairman/Chief Executive Officer of NDLEA, Brig. Gen. Mohamed Buba Marwa (Retd), commended the outstanding feats of officers and men across different commands for intensifying WADA advocacy lectures, balancing drug supply reduction and drug demand reduction efforts effectively.

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Oba Balogun Integral to My Political Journey – Olafisoye Mourns Late Olubadan

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A member of the Federal House of Representatives, Hon. (Prince) Olafisoye Wasiu Akinmoyede, has expressed deep sorrow over the passing of the Olubadan of Ibadan land, Oba Mahood Lekan Balogun, describing it as a personal loss to him and the entire indigenes of Lagelu Local Government area of Oyo State.

In a heartfelt condolence message addressed to the government of Oyo State, the Chairman of Lagelu Local Government, the Lagun family in Lagelu, where Oba Balogun hailed from, and the entire indigenes of Ibadan, the lawmaker conveyed his grief and sympathy for the demise of Oba Lekan Balogun, who passed away on Thursday night, just a few days after celebrating his second anniversary on the throne as the Olubadan of Ibadan land.

“Hon. Lafi,” representing the Akinyele/Lagelu federal constituency, expressed, “Though late Oba Balogun’s reign was short, it was monumental and historic to the people of the ancient city of Ibadan and humanity in general.”

Recalling the pivotal role played by the late Oba Lekan Balogun in his political journey, Hon. Lafi emphasized that the deceased monarch was instrumental in his career, providing both financial and moral support from his days as a councilor up to his current position as a federal lawmaker.

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The lawmaker extended his condolences to Governor Seyi Makinde, the Chairman of Lagelu Local Government, the Olubadan-In-Council, immediate and extended members of the Lagun family, and all Ibadan indigenes.

He assured them that the entire constituents of Akinyele/Lagelu stand in solidarity with them, offering prayers and support during this period of grief.

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Oyo: Oseni Mourns Late Olubadan, Reveres Oba Balogun’s Legacy

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A member of the House of Representatives, Engr. Aderemi Oseni, on Friday, described the late Olubadan of Ibadanland in Oyo State, His Imperial Majesty, Oba Mohood Olalekan Balogun, Alli Okunmade II, as a patriot and custodian of Yoruba values who gave his best while on the throne.

The late Oba Balogun, aged 82, who was the 42nd Olubadan of Ibadan Land, died at the University College Hospital (UCH) Ibadan a few hours after he was admitted to the tertiary health facility on Thursday night.

Oseni, who represents Ibarapa East/Ido federal constituency, said in his condolence message that the contributions of the late Olubadan of Ibadanland to the political, social, and economic life of the ancient city would remain indelible in the hearts and minds of those who interacted with him in politics and socio-economic life.

The Chairman, House of Representatives Committee on Federal Road Maintenance Agency (FERMA), in a statement by his media aide, Idowu Ayodele, added that Oba Balogun left an indelible mark and epitomised the qualities of a passionate leader on the Nigerian political plane and in business, using his knowledge and skill to serve God, his people, and the government in various capacities.

The lawmaker expressed his condolences to the Governor Seyi Makinde-led Oyo state government, Oba Balogun’s family, the Olubadan-in-Council, the State Traditional Council, and the people of Ibadanland and Oyo State at large.

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“Undoubtedly, our esteemed Olubadan wielded his influential presence to advocate for peace, harmony, and progress in Ibadan land and throughout Oyo State during his impactful two-year reign on the throne of his ancestors.

“Oba Balogun departed at a pivotal juncture in our nation’s history, leaving behind a void of his sagacious guidance and wealth of experience sorely needed. I implore Governor Seyi Makinde, the Olubadan-in-Council, the State Traditional Council, the people of Ibadan land and Oyo State, as well as all members of his immediate and extended family, to find solace in the enduring legacy and indelible mark he leaves behind,” the statement read.

Oseni offered prayers for the repose of the deceased monarch’s soul.

 

 

 

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