African development banks set to expand lending as capital buffers rise, S&P says
S&P Global Ratings said African regional development creditors are poised to expand lending to fill national financing gaps, as capital buffers strengthen and new frameworks increase their borrowing headroom.
The ratings agency said Africa's supranational lenders are increasingly central to plugging investment shortfalls and stabilising economies as external financing tightens.
With climate and infrastructure funding dominating their pipelines, S&P expects regional creditors to take on a larger role through 2025.
In its October release of the Supranationals 2025 Special Edition, S&P said updates to its multilateral lending institution framework could lift risk-adjusted capital ratios by about 10%, potentially unlocking $600–$800-billion in additional sovereign lending capacity by development banks.
S&P uses the measure to judge how much more an issuer can safely lend without weakening its credit profile. A higher ratio means a stronger ability to absorb losses.
S&P identified the African Development Bank (AfDB), East African Development Bank, African Trade & Investment Development Insurance, and Arab Bank for Economic Development in Africa (BADEA) as key players.
The AfDB has kept its AAA rating with “extremely strong” capital adequacy, expanding its portfolio to $27.3-billion in 2024 and signalling plans to scale up both sovereign and private-sector lending in coming years, the report said.
BADEA also lifted its exposure to $3.8-billion and aims to disburse roughly $18-billion between 2025 and 2029.
S&P cited hybrid capital issuance and exposure-exchange agreements - where lenders swap parts of their loan portfolios to spread risk - as tools that bolster resilience amid higher global rates.
Overall lending by multilaterals rose 4% between 2021 and 2024, with Africa accounting for 19% of the total.
Article Enquiry
Email Article
Save Article
To advertise email advertising@creamermedia.co.za or click here
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation


















