The World Bank’s International Finance Corporation (IFC) and the African Development Bank (ADB) will each buy R1-billion worth of bonds from South African financial services provider Nedbank, the proceeds of which Nedbank will use to finance low cost housing and small business development, it announced on Monday.

The R2-billion tier-two capital-qualifying bond would last for a minimum of ten years, and would be the IFC’s largest investment in sub-Saharan Africa’s financial markets to date, IFC associate director of operations James Scriven said at a joint media function in Sandton.

Nedbank CFO Mike Brown said that this “ground-breaking” transaction was also the first time that the IFC and the ADB would have worked together.

It was also the first offshore tier-two investment for Nedbank, he added.

ADB operations vice-president Mandla Gantsho said that the outcome of the investment would include more cash being available for low-income housing, black economic empowerment, small business development, and entrepreneurship.

The ADB had facilitated similar investments in South Africa, Kenya, and Ghana, he added.