Luxembourg's Ministry of Finance has confirmed that Pierre Gramegna, Minister of Finance, participated in the extraordinary assembly of the Board of Governors of the African Development Bank (ADB), which was held online on Friday 5 March 2021.
Luxembourg, together with Germany, Sweden and Denmark, is committed to the special and temporary increase in the callable capital of the bank, with a view to avoiding a downgrading of this institution following the prospect of degradation of some major shareholders.
In his address to the assembly, Minister Gramegna underlined “As one of the few member countries still strongly rated AAA, Luxembourg is now supporting the African Development Bank. Indeed, putting the institution in a position to operate a temporary increase in its callable capital is crucial to avoid a downgrading of this leading regional development bank in Africa. A degradation would have a considerable negative impact on the cost of financing the bank on capital markets, and would therefore severely limit its ability to support African countries just when the needs are most urgent in the face of the COVID-19 crisis."
In this context, Minister Gramegna reiterated Luxembourg's solidarity with the African continent in the common fight against the health, economic and social effects of the pandemic, and the poverty gap which continues to widen within and among African countries. The Minister also underlined Luxembourg's good cooperation with the bank in recent years.
Since Luxembourg became a member of the ADB in 2014, it has tried to support the bank in better accordance with its means. Whether through the organisation in 2016 of the last round of negotiations to replenish the resources of the African Development Fund, or even by offering sustainable finance or fintech services from its financial centre, Luxembourg supports the transition of the African Development Fund towards a more prosperous and sustainable future, through a financially capable and solid multilateral institution. In the context of the fight against the COVID-19 pandemic, the African Development Bank had chosen the Luxembourg Stock Exchange to list a social bond loan in the amount of $3 billion.