Diversified Infrastructure
Room2Run Synthetic Securitization
Pan-African
Room2Run is a Risk Protection Agreement related to a US$1 billion portfolio of seasoned pan- African loans held by the African Development Bank.
About project
Room2Run is a Risk Protection Agreement related to a US$1 billion portfolio of seasoned pan- African loans held by the African Development Bank.
Room2Run is the first-ever synthetic portfolio securitization between a multilateral development bank (MDB) and private sector investors, pioneering the use of securitization and credit risk transfer technology in a new segment of the financial markets. Structured as a synthetic securitization by Mizuho International, it transfers the mezzanine credit risk on a portfolio of 47 African Development Bank non-sovereign loans in the power, transportation, financial, and manufacturing sectors across Africa. Africa50 invested into Room2Run alongside Mariner Investment Group, a US investment firm.
Role of Africa50
Africa50 and Mariner Investment Group (a US investment firm) invested through a Risk Protection Agreement.
Our partners
African Development Bank | Newmarket Capital
Project impact
Development
- The African Development Bank is expected to redeploy its freed-up capital from Room2Run into infrastructure project finance assets, which provide significant capital to both traditional and renewable energy projects.
- Room2Run provides a template for attracting private capital from institutional investors into developing economies in a commercially viable way, which should help increase investment in the infrastructure and productive sectors of those economies.
Environment
- The African Development Bank ’s additional renewable energy projects are expected to lower greenhouse gas emissions across Africa while increasing energy access.
Employment
- In the long term, the increased investment by the private sector, stimulated through Room2Run, should increase job creation and employment.
Project Photos
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