AfDB grants a guarantee of €500 million on the Eurobond Cameroon
The country plans to raise 1.3 billion euros in financial markets.The African Development Bank (AfDB) has granted a partial credit guarantee of 500 million euros on the bond loan of 1.5 billion dollars (1.35 billion euros) that Cameroon is about to issue .
This loan will enable the country to finance part of the investment plan launched last December by the government to stimulate the Cameroonian economy.
It includes large-scale investment projects such as transportation and energy infrastructure.
This investment program will impact two operational priority sectors for the Bank: infrastructure and the private sector, the bank said in a statement.
It said this guarantee will help "mitigate currency risk that could arise from Cameroon's ongoing international capital markets operation, while contributing to the reduction of the interest bill paid by Cameroon".
In its statement, the institution added that the development projects funded by the Eurobond are aligned with AfDB's overarching Ten Year Strategic Goals (2013-2022), which aim "to promote inclusive growth and support the transition to green growth".
AfDB estimates that the economy of Cameroon is able to handle this increase in public debt, which
represented 19.3 per cent of nominal GDP at the end of 2014 - "well below the CEMAC's 70 per cent threshold".