The African Local Currency Bond Fund Anchors Angola’s First Sustainability Bond Issuance

The African Local Currency Bond Fund (ALCB Fund) has completed its first investment in Angola by anchoring the Sustainability Bond issued by Banco Angolano de Investimentos (BAI), one of the country’s leading commercial banks. The transaction is both the ALCB Fund’s debut investment in Angola and the first Sustainability Bond issued in the history of Angola’s capital markets.

The bond was admitted to trading on the Bolsa de Dívida e Valores de Angola (BODIVA) (Angola Debt and Securities Exchange) following a public offering. Launched with a target size of AOA 50 billion, the issuance raised AOA 57.5 billion after subscriptions exceeded the original offer. The offering received 454 subscription orders, which Cygnum Capital said reflects growing investor appetite for local currency investment opportunities and sustainable finance products in Angola. As anchor investor, the ALCB Fund committed AOA 9.1 billion, equivalent to approximately USD 10 million, supporting the execution of the transaction and helping establish a new benchmark within the domestic debt capital market. Technical assistance from the INFF Facility and Planet Hub supported the development of BAI’s Sustainability Bond Framework and its alignment with sustainability objectives and recognised market standards.

The ALCB Fund was established to strengthen African capital markets by acting as an anchor investor in local currency bond issuances. Across the continent, access to long-term funding remains constrained in many markets, while reliance on foreign currency borrowing can create balance sheet pressures and increase exposure to exchange-rate volatility. Local currency bond markets offer an alternative by enabling domestic institutions to access financing in the same currency in which their revenues are generated, helping reduce currency mismatches while broadening financing options for businesses and financial institutions.

BAI’s bond is structured as a use-of-proceeds instrument aligned with the Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines. Funds raised will be directed towards projects and activities that generate environmental and social benefits. Eligible sectors are agriculture, industry, logistics, transport, healthcare and pharmaceuticals. These are areas that play an important role in Angola’s economic diversification agenda and long-term development priorities, and that are central to efforts to expand productive economic activity, strengthen resilience and promote inclusive growth.

As the first Sustainability Bond admitted to trading on BODIVA, the transaction establishes a precedent and creates a framework that may support future sustainable debt issuances by banks, corporates and other market participants.

Olamipo Ogunsanya, Transaction Lead at the ALCB Fund (Cygnum Capital), said the transaction is an important milestone as the Fund’s first investment in Angola, and that BAI is setting an important precedent by issuing a listed Sustainability Bond. Ogunsanya hopes that it will encourage further issuers in Angola to access the domestic bond market.

Irisolange Verdades, Executive Administrator at BAI, said the issuance brings together three pillars of funding in local currency, financing the real economy, and the progressive integration of sustainability criteria through an innovative approach. Verdades noted that by subscribing, investors assume BAI’s credit risk while financing the real economy, driving productive activity, employment and inclusion in Angola, and welcomed the ALCB Fund as anchor investor and as the first international investor in an Angolan corporate bond of this nature.