The Shelter Afrique Development Bank (ShafDB), the Pan-African multilateral development institution specialising in sustainable housing and urban development, has announced a strategic partnership with the Arab Bank for Economic Development in Africa (BADEA) to bolster its capitalisation programme. Under the terms of the agreement, BADEA has committed USD 120 million in concessional financing to support eligible member states in settling and increasing their capital subscriptions to ShafDB.
This financing arrangement introduces an innovative structure that allows member states to access on-lending at favourable terms, thereby facilitating broader participation in the bank’s capital increase programme. The initiative marks a pivotal moment in ShafDB’s institutional evolution, as it transitions to a full-fledged development bank and strengthens its capital base to support expanded operations across the continent.
The Managing Director of ShafDB, Mr Thierno Habib-Hann, described the partnership with BADEA as a milestone. “This agreement with BADEA marks a critical step in strengthening our capital base and advancing our mission of financing affordable housing and sustainable urban infrastructure across Africa,” he stated. “We are grateful to BADEA for its strong partnership and unwavering support during this pivotal phase.”
The USD 120 million concessional facility will be applied in line with a tiered capitalisation programme, initially involving an equal allocation to all ShafDB member states. This will be followed by a reallocation process—first on a pro-rata basis and then on a first-come, first-served basis—designed to incentivise timely participation and maintain equity among shareholders.
BADEA President H.E. Abdullah KH ALMUSAIBEEH affirmed the institution’s strategic commitment to ShafDB’s objectives, remarking: “We see this capital programme as a strategic milestone in Shelter Afrique Development Bank’s evolution. BADEA is proud to back this initiative and we remain committed to our shared mission of enabling access to decent housing and inclusive urban development across Africa.”
ShafDB, originally established in 1981 in Lusaka, Zambia, has recently undergone a major transformation from a housing finance company to a development bank, a shift ratified by its shareholders during an Extraordinary General Meeting (EGM) in October 2023 in Algiers, Algeria. This structural change was further reinforced at the Annual General Meeting in June 2024 in Kigali, Rwanda, where shareholders endorsed a transformative capital increase programme. In December 2024, the board of directors formally approved a capital expansion exceeding USD 200 million.
The capital increase initiative is central to ShafDB’s plan to expand its capacity across the housing value chain, increase access to international capital markets, and support the bank’s efforts to obtain investment-grade credit ratings. With 44 African member states and two institutional shareholders—the African Development Bank (AfDB) and African Reinsurance Corporation (Africa-Re)—ShafDB operates through four business lines: the Financial Institutions Group (FIG), Project Finance Group (PFG), Sovereign and Public-Private Partnerships (PPP) Group, and the Fund Management Group (FMG).
The new capital structure is expected to not only enhance ShafDB’s balance sheet and capital adequacy, but also to significantly mobilise debt, attract new institutional investors, and broaden the bank’s technical assistance and lending programmes across its membership. The objective is to address Africa’s substantial housing deficit while promoting sustainable urbanisation and inclusive economic growth.
This development reflects a shared recognition between BADEA and ShafDB of the urgency in tackling the continent’s housing challenges, which are closely linked to broader issues of poverty, infrastructure gaps, and rapid urbanisation. As both institutions continue to collaborate, the emphasis remains firmly on fostering resilient, affordable and sustainable housing ecosystems across Africa.
