Amanze ChinonyeThe Arab Bank for Economic Development in Africa (BADEA) has approved a $120 million concessional facility to support the capitalization of Shelter Afrique Development Bank (ShafDB), marking a major step forward in the Pan-African institution’s efforts to scale up affordable housing and urban development financing across the continent.
The agreement, signed in Nairobi, Kenya, is part of a broader strategic initiative to strengthen ShafDB’s capital base following its transformation into a full-fledged development finance institution. The funding will enable eligible member states to settle and increase their capital subscriptions to the bank, thereby enhancing its equity position and operational capacity.
Join our WhatsApp Channel“This agreement with BADEA marks a critical step in strengthening our capital base and advancing our mission of financing affordable housing and sustainable urban infrastructure across Africa. We are grateful to BADEA for its strong partnership and unwavering support in this pivotal phase of our institutional evolution,” said Thierno Habib-Hann, Managing Director of ShafDB.
The facility introduces an innovative on-lending model, allowing member states to access funds at competitive terms. The capital increase initiative will be implemented through a phased structure beginning with equal allocations to all member states, followed by reallocation on a pro-rata and then a first-come, first-served basis. The approach is intended to promote active participation and ensure fairness among member states.
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BADEA President, H.E. Abdullah KH ALMUSAIBEEH, described the partnership as a strategic milestone. “BADEA is proud to back this initiative, and we remain committed to our shared mission of enabling access to decent housing and inclusive urban development across Africa,” he said.
The urgency to enhance equity capital follows ShafDB’s formal transition into a development bank, a move ratified by shareholders at an Extraordinary General Meeting held in Algiers, Algeria, in October 2023. This transformation set the stage for a broader capital expansion drive, with shareholders endorsing a capital increase exceeding $200 million at the Annual General Meeting held in Kigali, Rwanda, in June 2024. The initiative was approved by the board in December 2024.
Mr. Hann noted that the expanded capital base will not only enable the bank to increase financing across the housing value chain but also position it to access more competitive funding from both African and international capital markets. “It reinforces our role in addressing Africa’s housing deficit and driving inclusive urban development across our 44 member states,” he said.
The capitalization program is also designed to strengthen ShafDB’s balance sheet, improve its creditworthiness toward achieving investment-grade ratings, attract new institutional investors, and expand both its lending and technical assistance programs across member countries.
Established in 1981 and headquartered in Nairobi, Shelter Afrique Development Bank is a Pan-African multilateral development institution jointly owned by 44 African governments, the African Development Bank (AfDB), and the African Reinsurance Corporation (Africa-Re). Its operations span four business lines: financial institutions, project finance, sovereign and public-private partnerships, and fund management.
Founded in 1974 by the Arab League, BADEA is a regional development finance institution that supports economic and technical cooperation between Arab and African countries through concessional financing, development loans, and capacity-building programs.
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