ADIA to grant USD 100 mn repo to support sustainability investments in Africa: The Abu Dhabi Investment Authority (ADIA) is set to invest USD 100 mn into the African Liquidity and Sustainability Facility (LSF) and the African Export-Import Bank (Afreximbank) under a repurchase agreement (or repo facility), ADIA said in a statement. The temporary financing facility will be directed towards providing liquidity to the African sovereign debt market and encouraging green and sustainable investments in Africa.

The details: The repo agreement is being facilitated by BNY Mellon under its Triparty Facility system. ADIA has already closed half of the repo transaction, lending seven African nations bonds worth USD 50 mn, the authority said in the statement, issued during COP28.

But what is a repo agreement? Repo financing is a form of borrowing which involves the sale of a debt security to a lender with a promise to buy it back at a later date, with other securities acting as collateral. Repo typically involves overnight and short-term borrowing, but repurchase agreements can also have a longer remit. You can read more about repo here.

About LSF: Designed by the UN Economic Commission for Africa, the LSF was launched by Afreximbank at COP26 in Glasgow, 2021. The facility works with African governments and private investors to improve the sustainability and liquidity of the African sovereign debt market by promoting increased green financing instruments for African countries.

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