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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.

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.

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.

“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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Oyo: Makinde scrambles as defections threaten political structure

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Oyo State Governor, Seyi Makinde, has reportedly begun a series of meetings with members of his cabinet and key political stakeholders in the Allied Peoples Movement in a bid to address the wave of defections and resignations affecting his political camp.

The meetings, according to sources within the camp, are aimed at addressing growing discontent among party members and preventing further departures ahead of the 2027 governorship election.

The development follows the recent defection of several prominent politicians from Ogbomoso zone to the All Progressives Congress, a move that has reportedly unsettled the governor’s political associates.

Among those who recently left the governor’s camp are his Chief of Staff, Segun Ogunwuyi; Alhaji Rasak Gbadegesin, popularly known as Agbeti; Timothy Oyeniyi; Alabi Olateju; Isaiah Adegbite; Peter Oyetunji; and Jimoh Sikiru, the APM chairman in Ogbomoso North.

Several other political figures and local government representatives from Ogbomoso North, Ogbomoso South, Surulere and Ogo-Oluwa have also reportedly joined the APC.

The latest developments came on the heels of a series of resignations from the Makinde administration.

The Commissioner for Budget and Economic Planning, Ayobami Oluwaseun Ojo, and the ministry’s Special Adviser, Simeon Adegbola Oyeleke, resigned their appointments with effect from November 2.

While Ojo did not publicly disclose the reason for his resignation, Oyeleke reportedly cited dissatisfaction with the working environment, saying it had become increasingly difficult to represent the aspirations of his people while serving in government.

Also, Sunday Olugbenga Falana resigned from the Oyo State Independent Electoral Commission, thanking the governor for the opportunity to serve without publicly stating his reason for leaving.

The Director-General of the Due Process Office, Tara Adefope, also reportedly left the administration.

Other prominent political figures who have parted ways with the governor include the Chairman of the Governor’s Advisory Council, Hosea Agboola, popularly known as Alleluyah; former Deputy Governor, Ambassador Taofeek Arapaja; and Alhaji Bisi Olopoeniyan.

Agboola and Arapaja have since moved into the APC.

The departures have also affected some of the governor’s political strategists. They include former Political Adviser to the governor, Chief Babatunde Oduyoye, and his former Special Adviser on Security, Fatai Owoseni.

Their exits have reportedly raised concerns among members of the governor’s political circle about the strength of the structures that have supported his administration and political activities.

Worried by the growing number of departures, Makinde is said to have intensified consultations with members of his cabinet, party leaders and remaining loyalists in an effort to prevent further defections.

Sources familiar with the meetings disclosed that the governor had been holding consultations with some of his associates and aggrieved stakeholders at his residences in Ikolaba and Kolapo Ishola Estate, Ibadan.

At one of the meetings, which reportedly brought together members of his diminishing inner circle, Makinde was said to have expressed concern about the trend and sought suggestions on how to retain those still within the party.

A source familiar with the discussions said the governor wanted to know what could be done to prevent further defections and protect the party’s position ahead of the next governorship election.

The source added that the meetings also provided an opportunity for some attendees to express their grievances over what they considered the causes of the crisis.

According to the source, some participants blamed the situation on the governor’s alleged unilateral decision to settle for Hon. Bimbo Adekanmbi as the party’s governorship candidate for the 2027 election.

Others reportedly criticised some policies of the administration, which they believed had generated negative public reactions and contributed to the growing discontent within the political camp.

The latest meeting, which reportedly lasted until the early hours of Thursday, ended without any clearly defined strategy to address the situation.

A source at the meeting said some participants expressed the fear that more political figures could still leave the camp if the grievances were not addressed.

 

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Late Lam Adesina’s Legacy Remains Enduring – Oseni

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The All Progressives Congress (APC) candidate for Oyo South Senatorial District, Hon.  Aderemi  Oseni, has described the late former Governor of Oyo State, Alhaji Lamidi Onaolapo Adesina, as a political leader whose contributions to democracy, education and the development of the state remain significant.

Oseni, in a statement issued on Wednesday by his Media Aide, Idowu Ayodele, to mark the 14th anniversary of the former governor’s death, said Lam Adesina’s life and political career offered valuable lessons in courage, conviction and commitment to public service.

He recalled that the late governor, who died on November 11, 2012, at the age of 73, played an important role in Oyo State’s political history. His involvement in the struggle against military rule, particularly through the National Democratic Coalition (NADECO), reflected his commitment to democracy and the restoration of civilian rule in Nigeria.

The lawmaker who currently represents Ibarapa East/Ido Federal Constituency and chairs the House Committee on Federal Roads Maintenance Agency (FERMA) ,  also noted that Lam Adesina’s background as a teacher and journalist shaped his interest in education, public affairs and the political development of the country. He said the former governor was closely associated with the progressive political ideals of Chief Obafemi Awolowo, particularly the emphasis on education, social welfare and improving the living conditions of ordinary people.

“Lam Adesina was a politician who stood firmly by his convictions. He was part of the struggle for democracy at a time when doing so came with personal risks. His contributions to Oyo State and his commitment to the ideals he believed in remain important parts of our political history,” Oseni said.

The APC chieftain further recalled that Lam Adesina governed Oyo State between 1999 and 2003, with attention to education, healthcare, rural development and rural electrification. He noted that the former governor’s experience as an educationist was reflected in his interest in expanding educational opportunities and improving the lives of the people.

He added that the late governor’s  popular nickname, Ore Mekunnu, meaning friend of the common people, reflected his association with ordinary citizens. According to Oseni, the name remains a reminder that public office should be about serving the people and addressing their needs.

The APC Senatorial candidate noted that the annual remembrance of the late governor should provide an opportunity for political leaders to reflect on the responsibilities of leadership and the values that should guide public service. He stressed that remembering past leaders should go beyond ceremonies and tributes, adding that their contributions should serve as lessons for those currently entrusted with public responsibilities.

“Fourteen years after his passing, we should continue to remember Lam Adesina for what he stood for. His commitment to democracy, education and the welfare of the people should remind us that public office is a trust. Those of us in positions of responsibility must remain conscious of the people we serve and the legacy we hope to leave behind,” he added.

Oseni extended his thoughts to the family, political associates and admirers of the late governor, as well as the people of Oyo State. He prayed that Almighty Allah would grant his soul eternal rest, noting that his contributions to the state’s political development and Nigeria’s democratic journey remained worthy of recognition.

 

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Alli hails Arapaja at 68, calls him pride of Oyo

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The governorship candidate of the All Progressives Congress in Oyo State, Senator Sharafadeen Alli, has described former Deputy Governor Taofeek Arapaja as a brave citizen and a source of pride to the state as he marks his 68th birthday.

Alli, in a birthday message personally signed on Tuesday, praised Arapaja for his contributions to democracy, public service and good governance, describing him as a statesman whose impact on Oyo State and the country remained significant.

He said the former deputy governor had distinguished himself in various public offices through courage, loyalty, wisdom and commitment to the welfare of the people.

Alli also described Arapaja as a rare gift to Oyo State, Nigeria and humanity, noting that his record of service reflected his dedication to leadership and nation-building.

He traced Arapaja’s political journey from his tenure as chairman of Ibadan South-East Local Government to his election into the House of Representatives and subsequent appointment as deputy governor of Oyo State between 2007 and 2011 under the late Governor Adebayo Alao-Akala.

The APC governorship candidate also recalled Arapaja’s diplomatic service as Nigeria’s ambassador to Iran and later Jordan, where he served until 2015.

According to Alli, Arapaja has excelled as a family man, politician, public administrator and diplomat, earning respect through his conduct and commitment to public service.

“Ambassador Arapaja has excelled as a family man, a politician, a public administrator, a diplomat and as a patriot. In every assignment, he has demonstrated the courage to speak the truth, the commitment to serve and the passion to lift others,” he said.

Alli further described the celebrant as a bridge-builder and political mobiliser whose experience and political sagacity had continued to shape the state’s political landscape.

He added that Arapaja had remained consistent in leadership, character and service, noting that his contributions deserved recognition.
While wishing him many more years,

Alli prayed for good health, long life and renewed strength for the former deputy governor to continue contributing to the development of Oyo State and Nigeria.

“As you add another year today, I celebrate the enigma, the bridge-builder and the mobiliser. Happy 68th birthday, Your Excellency. Oyo State is proud of you,” he added.

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