Investor Presentation

The African Development Bank Group

May 2014

Overview of the Bank Group ----- 3

Financial Profile of the African Development Bank ----- 30

Capital Market Activities ----- 43

Appendix ----- 57

2

4

Table of Contents

1

3

2

3

Overview of the Bank Group 1

Africa is a continent of contrast, rich in natural resources yet its people are among the poorest in the world. The image of Africa that gets projected in the world is that of a continent with disease, hunger, corruption and the need for aid beyond foreseeable future. But, there is another story that is less told which acknowledges the challenges faced by the continent but also recognizes the progress made in terms of more children going to school, less war, growing quest for better governance and an expanding middle class. The African Development Bank is part of that story.

The African Development Bank Group

Africa’s premier development financial institution

The AfDB Group: three constituent institutions, separate legally and financially, with a common goal…

• Board of Governors: • Highest decision making body, • Composed of Ministers of Finance

and Ministers of Cooperation of the Bank’s member countries

• Decisions by both Boards require two third majority or 70% should any member require so

African Development Bank (“AfDB”) • Established in 1964 • 78 member countries • Authorized capital: US$ 103 billion • Resources raised from capital markets • 0% risk weighting under Basel II • Level 1 under Basel III

African Development Fund (“ADF”) • Concessional financing, established in

1972 • Financed by 26 countries participants

and 4 regional donors • Subscription: US$ 35 billion • Focus on low income countries • Replenished every 3 years

Nigeria Trust Fund (“NTF”) • Established in 1976 by Nigeria • Targeted at the Bank’s needier

countries • Maturing in 2018 • Total resources: US$ 242 million

…focused on combating poverty, and improving living conditions on the continent

Governance and Oversight

• Board of Directors : • 20 Executive Directors elected by

the Board of Governors • Oversees the general operations of

the Bank

4

AfDB, the keystone of the Bank Group

PARTNER OF CHOICE

• Increased operations and leadership of continent-wide initiatives for greater regional integration and sustainable development

• Leveraging scarce resources

• Voice of Africa on development issues

• High level panel on Fragile States

STRONG FINANCIAL STANCE

• Increased capacity to deliver on our mandate

• Careful balance between maximizing development effectiveness and maintaining our long term financial soundness

AAA RATING DRIVERS

• Strong liquidity and capital position • Franchise value

• Strong commitment from shareholders • Preferred creditor status

• Prudent financial management and policies

5

Africa’s own triple A rated institution

AfDB’s robust capitalisation, ample liquidity buffers and sound

risk-management framework help to offset the existing risks that

the AfDB carries on its balance sheet and creates substantial

headroom in risk-bearing capacity to further expand its lending.

AfDB’s capitalisation is extremely strong, and is one of the key

factors supporting its ratings. The equity to asset ratio stood at

25.2% at end-2012. The ratio of usable capital to required capital

ratio, at 16.2x at end-2012, is also higher than for most peers.

The ratings mainly reflect the strong support the Bank enjoys

from African and non-African member countries; its solid

financial base; its prudent financial and risk management

policies; and its status as a "preferred creditor“.

30 September 2013

10 July 2013 16 August 2013

AAA/Stable/A-1+ Aaa/Stable/P-1

Aaa/Stable AAA/Stable/F1+

6

19 December 2013

The African Development Bank (AFDB) benefits from a solid

liquidity and capital position, along with wide support from its

member countries, including 'AAA' rated sovereigns.

Global partnership for the development of Africa

Africa

Middle East

Asia

Americas

Argentina 0.1% Brazil 0.5% Canada 3.8% U.S.A 6.5%

Algeria 4.2% Angola 1.2% Benin 0.2% Botswana 1.1% Burkina Faso 0.4% Burundi 0.2% Cameroon 1.1% Cape Verde 0.1% Cent.Afr.Rep. 0.1% Chad 0.1% Comoros 0.02% Congo 0.5% Cote D'ivoire 3.7% Dem.Rep.Congo 1.0% Djibouti 0.03% Egypt 5.4% Eq.Guinea 0.2% Eritrea 0.04% Ethiopia 1.6% Gabon 1.2% Gambia 0.2% Ghana 2.3% Guinea 0.4% Guinea Bissau 0.04% Kenya 1.4% Lesotho 0.1% Liberia 0.2%

China 1.1% India 0.2% Japan 5.5% Korea 0.5%

Kuwait 0.5% Saudi Arabia 0.2% Turkey 0.1%

Europe

Austria 0.5% Belgium 0.6% Denmark 1.2% Finland 0.5% France 3.7% Germany 4.1% Italy 2.4% Netherlands 0.9% Norway 1.2% Portugal 0.2% Spain 1.1% Sweden 1.5% Switzerland 1.5% U.K. 1.7%

Libya 4.0% Madagascar 0.7% Malawi 0.3% Mali 0.4% Mauritania 0.1% Mauritius 0.7% Morocco 3.5% Mozambique 0.6% Namibia 0.3% Niger 0.3% Nigeria 9.2% Rwanda 0.1% Sao Tome & P. 0.1% Senegal 1.1% Seychelles 0.04% Sierra Leone 0.2% Somalia 0.04% South Africa 4.8% Sudan 0.4% Swaziland 0.1% Tanzania 0.8% Togo 0.2% Tunisia 1.4% Uganda 0.5% Zambia 1.3% Zimbabwe 2.0%

7

Note: Data as of 31 January 2014

G-7 Shareholding: 28%

In October 2013, the Republic of Turkey became the 78th member

of the AfDB and the 26th participant in ADF

4,978 12,830

20,311

60,265

2,712

27

248

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Paid-in Capital AAA CallableCapital

AA+ to A-Callable Capital

Other CallableCapital

31-Mar-14 Remaining subscription expected

Overwhelming support for a tripling of the capital

Capital Structure of the Bank

Capacity to meet increased level of future demand and

support the business growth plan

200% capital increase with 6% paid-in

portion raising the capital to around USD

100 billion

Reinforce the Bank’s franchise value, key

prudential ratios and AAA credit rating

Callable capital is the commitment by each shareholder to make additional capital available to

the institution in case of financial distress

There has never been a call on the capital of the Bank

(in USD million)

Demonstrated strong shareholders support

76 213 574 1,684 16,311

8,563

66,059

Initial1963

GCI-I 1974 GCI-II1976

GCI-III1981

GCI-IV1987

GCI-V1998

GCI-VI2010

(in USD million)

Additional special capital increases made to admit new members

The Bank’s General Capital Increase (GCI)

8

The Bank Group addresses the diverse needs of the continent

Preserving the long-term financial integrity of the AfDB

Viable enterprises and multinational projects, additionality and development outcome • Direct loans • Lines of credits • Equity participation • Guarantees

Self-sustaining, export oriented project, located in an ADF-eligible country

ADF Concessional Financing 37 low-income countries eligible to loans and grants

Blend Countries

Countries eligible for AfDB and ADF Funding

• Job creation • Government revenues • Financial return • Foreign currency earnings

Additionality and Development Outcome Assessment-Core indicators

Enclave Finance

Private Sector Operations

AfDB Sovereign Operations 15 middle-income countries eligible to receive AfDB funding Criteria: • GNI per capita • Country’s creditworthiness

9

Financing solutions to Africa’s challenges

Infrastructure that unlocks the growth and development potential of Africa

remains key

* A year of exceptional demand for Bank Group resources due to the global financial crisis ** Including loans, grants, equity investments, emergency operations, HIPC debt relief, loan reallocations and guarantee, Fragile States Facility

Focusing on interventions aligned to Africa’s priorities

Promoting social & human development by focusing on skills development and science & technology for job creation

Multisector operations which broadly cover public sector management and

poverty reducing budget support, bear closely on the success of other

interventions

Providing resources to financial intermediaries

Continuing interest in rural development and actions to combat poverty through increased approvals for agriculture and

rural development

Delivering vital resources for scaling up access to safe water and sanitation

Transport 32.2%

Energy 16.0%

Multisector 12.6%

Agriculture 12.0%

Social 9.4%

Water Supply & Sanitation

8.4%

Finance 8.1%

Communication 1.0%

Environment

0.3%

2,783

8,785

3,975 5,664

3,197 2,821

2,565

3,805

2,243

2812

2,905 3,495

-

2,000

4,000

6,000

8,000

10,000

12,000

2008 2009* 2010 2011 2012 2013***

ADB Approvals ** ADF Approvals **

Africa’s preferred financial partner

(in USD million)

5,348

12,590

6,218

8,476

6,316

10

2013 approvals

6,102

*** Provisional

Powering the infrastructure that drives growth

Water USD 452 million

Energy USD 1.37 billion

Africa’s Priority Action Program (2012-2020)

• Africa’s infrastructure financing requirements, mostly for power and

energy, in the USD trillions in the longer term

• About 30 countries affected by chronic power problems

• Transportation costs increase the price of African goods by 75%

• Poor infrastructure depresses productivity in fragile states by an

estimated 40%.

• The continent invests only 4% of GDP on infrastructure, compared

with 14% in China

Africa’s infrastructure needs remain substantial Infrastructure development as a key enabler of

regional integration

USD 2.7 billion

• Promoting regional economic integration

• Reduction in energy costs and increasing access

• Reducing transport costs

• Enhancing water and food security

• Boosting ICT services and connectivity

Innovative financing Projects

Transformational infrastructure connecting African roads, railways, oil and gas pipelines, power networks, and ICT

Program for Infrastructure Development in Africa (PIDA) estimated at USD 360 billion by 2040

• 51 immediately actionable programs, including the

40,000 MW Inga power plant in DRC, promoting

regional integration

• Africa50 Fund will bring additional resources and capacity to

the continent

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Investing in people: one billion opportunities

AfDB supports universities and regional centers of excellence

USD 807 million approved in 2012 focusing on skills and entrepreneurship in higher education, science and

technology, in close partnership with the productive sectors and using modern technologies

Ghana Malawi Kenya

Uganda Tunisia

Contributing to Africa’s education over 2010-2012

• Over 4 million students and scholars reached

• 4,501 classrooms and educational support facilities

constructed/rehabilitated

• Over 10 million textbooks and teaching materials supplied

• Over 56,000 teachers and other staff recruited/trained

• Over 656,000 students newly enrolled

20 to 25% unemployment across Africa vs. 9%

worldwide

Youth account for about 60% of the unemployed

Number of university graduates in Sub-Saharan Africa more than tripled (1999 to 2009) but funding increased more slowly

hindering educational quality

Most of underemployed young are in low productivity household enterprises or the

informal economy

Building skills and raising employability more pertinent than ever

25% of the 25-34 with higher education is unemployed;

one-fifth is employed in the informal sector

Job-creating growth

Skills development

Development of safety nets to

protect against economic and social shocks

AfDB’s Human Capital Strategy for Africa to transform teaching, learning, and health services for one billion Africans (2013-2017)

Giving voice to all citizens for improved quality of public services and efficiency of public spending

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Strengthening accountability and transparency

Strengthening public financial management systems

Promotion of sound macroeconomic management

Governance of natural resources

USD 750 million approved in 2012 for 42 operations across 22 countries

Restoration of Fiscal Stability and Social Protection budget support programme (USD 40 million)

• Alleviating foreign exchange shortages

• Promote fiscal and macro-economic stability

• Protect social spending

• Macroeconomic management improved: low budget deficits and realistic and stable exchange rates

• Tax revenue has risen from 10.5% to 14.7% of GDP

• Time to start a business halved & time for contract enforcement fallen by 50 days

• Support to RMCs to improve natural resource governance across value chain, including EITI in 8 countries in 2012

Sound climate for business and investment

Sustaining Malawi’s reforms to stabilise the economy

Program based operations

Institutional support program

Analytical and advisory services

Quality of governance critical to development

Complex commercial transaction

negotiations

Capacity building

Combating vulture funds

USD 5.23 million approved in 2012 across 11 projects in Burkina Faso, Djibouti, DRC, Ghana, Guinea, Kenya, Tunisia

and Zambia

Hosted by the AfDB

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Sowing the seeds for productivity and food security

Contributing to Africa’s agriculture sector (2010-2012) • 4,937 rural facilities constructed/rehabilitated • Over 1.5 million livestock provided/vaccinated • Over 2.8 million plants introduced • 4,581 community-based projects executed

Response to the Food Crisis in the Sahel Programme

• Targeting 800,000 small farmers who provide 90% of the food needs in the region

• USD 351 million programme to restore food security covering 12 countries

USD 587 million approved in 2012 for 18 operations covering 16 countries

Livelihood interventions

Climate change adaptation

Building rural infrastructure

Disaster risk reduction measures

Agriculture employs 65-70% of the African workforce

Strengthening capacity for

the delivery of agricultural

services

Rehabilitation of agricultural

infrastructure

Construction of access and feeder

roads

Market infrastructure and storage facilities

Support to climate change adaptation

measures

Drought Resilience and Sustainable Livelihoods Programme in the Horn of Africa

First phase in 2013 to focus on Djibouti, Ethiopia, and Kenya

Food security

Improved water control &

distribution systems

Increased productivity &

income for agro-pastoralists

Improved road networks

Development of agro-industry

& market infrastructure

Enhanced regional

cooperation & coordination

Accounts for roughly a third of the continent’s GDP

Women make up more than half of Africa’s farmers and produce up to 90%

of the continent’s food

Promoting agricultural production a way to drive inclusive growth and

reduce poverty

Africa is the only continent where per capita food production has declined over the past 30 years

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Rural Water Supply and Sanitation Initiative

Addressing Africa’s water and sanitation needs

USD 452 million approved in 2012 to scale up access to safe water and sanitation, promoting innovative technologies, and supporting knowledge management activities in RMCs

The Africa Water Vision for 2025

Strengthening governance

of water resources

Improving water wisdom

Meeting urgent water needs

Strengthening the financial base for the desired water

future

USD 4 million grant from the African Water Facility for water provision in the Darfur region

• Provided water supply to 56 million people and sanitation access to 41 million people since 2003

• Accelerate access to drinking water supply and sanitation in rural Africa to attain the African Water Vision of 2025 and the MDG targets

• 6 projects approved in 2012 for a total amount of USD 83 million across the Gambia, Chad, Liberia, CAR, Djibouti and Mauritania

• Initiative of the African Ministers’ Council on Water, administered by the Bank

• Established to help countries achieve the objectives of the Africa Water Vision of 2025

• 75 operations approved amounting to USD 118 million since 2006

• 6 projects approved in 2012 for a total amount of USD 12 million

African Water Facility

Equitable and sustainable use and management of water resources

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US Treasury Awards for Development Impact

16 AfDB is the first multilateral development bank to receive recognition for two projects in the same year

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• Created an innovative referral and counter-referral system through which the country could begin paying more attention to GBV

• Raised awareness of GBV for over 1.5 million community members.

• Established baseline data and indicators on gender equality (access to education, employment and health, GBV data, etc.)

• Rehabilitated and equipped the gynecological and obstetrical departments of two regional hospital centers, and several health centers

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• Halved the cost to transport produce to major towns and halved the journey time

• Reduced post-harvest losses by approximately 20%, especially for perishables such as cabbage, tomatoes, pineapples, and watermelons

• Farm gate price increases of staple products (maize, Milk, bananas) demonstrate the success of the programme

Helped the lives of victims of Gender Based Violence (GBV) through USD 31 million grant

USD 45 million support to increasing agricultural productivity and ensuring markets function

At the apex of development initiatives on the continent

Making Finance

Work for Africa

Connect Africa Initiative to bridge gaps

in ICT infrastructure

Trade Finance Initiative

Investment Climate Facility

Africa Water Facility

Multi Donor Water

Partnership Program

African Financing

Partnership

Rural Water Supply &

Sanitation Initiative

Debt Relief HIPC, MDRI

Fragile States Facility

NEPAD

Infrastructure Project

Preparation Facility

Infrastructure Consortium For Africa

Extractive Industries

Transparency Initiative

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Two objectives to support transformation

Three areas of special emphasis

At the heart of Africa’s transformation

Inclusive growth

Five core operational priorities:

Transition to green growth

Age Gender Geography

Building resilience

Managing natural

resources

Sustainable infrastructure

Fragile States

Agriculture & Food Security

• Infrastructure development

• Regional integration

• Private sector development

• Governance

• Skills & technology

Gender

A continuum & regional approach

Supporting value chains

Economic empowerment, legal & property rights

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AfDB Green Bond: Eligible projects

Greenfield Renewable Energy Generation (e.g. solar, wind, geothermal, and ocean power)

Biosphere conservation projects (reduce emissions from deforestation and degradation of ecosystems)

Solid Waste Management (e.g. incineration of waste, landfill gas capture and landfill gas combustion)

Demand-side Brownfield and Greenfield Energy Efficiency (e.g. energy efficiency improvements in lighting and equipment; retrofit of transmission lines, substations or distribution systems to reduce technical losses)

Vehicle energy efficiency fleet retrofit or urban transport modal change

Water Supply and Access (e.g. water saving measures such as introduction of less water intensive crops or preservation of soil moisture and fertility)

Urban Development (e.g. rehabilitation and upgrade of urban water drainage systems in areas vulnerable to frequency and/or severity of flash floods and storm surges brought by climate change)

Industrial Processes (reduce GHG emissions from industrial processes improvements and cleaner production)

Fugitive emissions and carbon capture (e.g. carbon capture and storage, reduction of gas flaring or methane fugitive emissions in the oil and gas industry, coal mine methane capture)

19

Morocco Africa’s largest Concentrated Solar Power Plant

Ouarzazate I Concentrated Solar Power (CSP) Project

AfDB financing: USD 240 million

With the 160 MW CSP Plant: • Annual GHG reductions of 0.250 MT

CO2e per year • Creation of 800 jobs between 2012

and 2014 and 50 permanent jobs thereafter

• Increase in the share of renewable energies in Morocco’s energy supply by 2020

• Trade balance improved

Key expected results: • 160 MW of CSP capacity (by end 2014) • Curb CO2 emissions by 6 million tons

20

South Africa Eskom Sere Wind Farm – tapping into vast wind potential

Eskom Western Cape Province Wind Energy Facility

AfDB financing: USD 235 million • The purpose of the Eskom wind power

program is to scale up the wind power program from the current level of 100MW to 800MW over 5 years and to 2,000MW by 2020

• With the 100 MW Wind Plant: • Annual GHG reductions of 0.240 MT

CO2e per year • Creation of 1500 jobs during

construction • Enhance power supply and energy

security • Development of the first utility-scale

wind power plant in South Africa

Key expected results: • 100 MW of Wind capacity • Curb CO2 emissions by 4.8 million tons

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Morocco ONE Integrated Wind/Hydro Energy Program

ONE Integrated Wind/Hydro Programme

AfDB financing: USD 450 million • The purpose of the program is to construct

three wind farms of 100-300MW capacity and two hydro facilities to supply base-load power

• With the program: • Annual GHG reductions of 3.2 MT

CO2e per year • Creation of 4000 jobs during

construction and 350 permanent jobs • Achieve the large scale

commercialization of wind energy in Morocco

• The project will ultimately contribute to a more diversified energy sector and greatly reduced CO2 emissions

Key expected results: • 750 MW of Wind capacity • Curb CO2 emissions by 65 million tons • 86,000 new rural household connections

22

Zambia Itezhi Tezhi Hydro Generation Project – innovative PPP structure

Itezhi Tezhi Hydro Project

AfDB financing: USD 35 million • The objective of the project is to design,

construction and operation of a 120 MW independent power plant through a concession agreement under a public-private partnership (PPP).

• With the 120 MW hydro plant: • Annual GHG reductions of 0.360 MT

CO2e per year • Creation of 120 permanent jobs • 5% increase in electricity access

• The project will reduce poverty through the supply of household, commercial and industrial electricity and create an enabling environment for business

Key expected results: • 120 MW of Hydro capacity • Curb CO2 emissions by 14.4 million tons

23

Cape Verde Wind power drives public-private collaboration in Cape Verde

Cabeólica Wind Power Project

AfDB financing: EUR 15 million • The purpose of this project is to drive up

the share of renewable energy in the national energy mix

• With the 25.5 MW 4 Wind plants: • Annual GHG reductions of 0.85 MT

CO2e per year • Creation of 80 jobs during

construction and 10 permanent jobs • Making up the first RE public private

partnership in the Cape Verdean infrastructure sector

• Help achieve government objective of sourcing 50% of total energy generation from renewable sources by 2020

Key expected results: • 25.5 MW of Wind capacity • Curb CO2 emissions by 2.1 million tons

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Third Party Assurance

“A clear impression of an institution that is well aware of the challenges posed by climate change as well

as other environmental and social concerns that may be associated with investments projects. In

particular we are pleased with the consciousness shown towards the external impacts of projects both

across space and time”

CICERO, 1st September 2013

25

An independent research institute, the Center for International Climate and Environmental Research (CICERO) based in Oslo, has provided a second opinion on the Bank’s green bond framework and its approach to climate financing

Green Bond framework: Project evaluation & selection

26 Green Bond Project Portfolio

Overall screening and selection

of projects (phase 1)

• Energy, Environment and Climate Change Department with Treasury Department evaluate and select projects for the green bond portfolio according to the Bank’s green bond framework

All projects

Joint MDB Mitigation/Adaptation Climate

Finance Tracking principles

AfDB’s detailed Methodology for Tracking Climate Mitigation and Adaptation Finance

Bank’s Environmental Strategy permeates design of

all projects

• Energy, Environment and Climate Change Department with operational departments evaluate and select climate change projects according to the Bank’s climate finance tracking methodology

Phase 1

Phase 2

Application of green bond framework (phase 2)

• An amount equal to the net proceeds of the bonds will be allocated within the treasury’s liquidity portfolio, to a sub-portfolio, that will be linked to the AfDB’s lending operations in the fields of climate change adaptation and mitigation (“eligible projects”)

• So long as the bonds are outstanding, the balance of this sub-portfolio will be reduced, at the end of each semester, under the Bank’s debt allocation framework, by amounts matching the disbursements made during the semester in respect of eligible projects

Green Bond framework: Allocation of proceeds

27

Green Bond framework: Reporting

Progress status report on the selection and implementation of the projects which are part of the green bond portfolio (e.g. information on implementation status, disbursement status and other relevant indicators as they are collected as part of the Bank’s project monitoring procedures)

Key information about the AfDB’s Green Bond Program and Framework, including project selection criteria

Key documents related to AfDB’s Green Bond Program and links to other relevant Bank documents such as the Long-Term Strategy and the Environment Policy

To enable investors to follow the implementation of AfDB’s Green Bond Program, a dedicated website has been established which includes, among other things:

28

http://www.afdb.org/en/topics-and-sectors/initiatives-partnerships/green-bond-program/

2 Financial Profile of the African Development Bank

The financial position of the AfDB is very strong. Thanks to its solid capitalization, ample liquidity buffers and prudent risk-management framework the institution has the capacity to absorb potential shocks emanating from the turbulent operating environment. The Bank has substantial headroom in risk- bearing capacity to further expand its lending. Continued financial and operational prudence will remain key.

29

The African Development Bank

(in USD million) 2008 2009 2010 2011 2012 2013

Assets 19,363 26,940 29,483 31,107 32,605 32,335

Loans 8,987 11,658 12,596 14,210 16,928 17,842

Investments 7,048 11,620 11,448 11,653 9,971 9,372

Borrowings 10,331 16,587 18,450 19,810 20,408 19,939

Equity 7,178 7,433 7,423 7,494 8,207 8,980

Paid-in Capital net of CEAS* 3,365 3,431 3,377 3,601 4,108 4,581

Reserves 3,813 4,002 4,046 3,894 4,100 4,400

Income before distributions 469 362 329 253 301 278

Subscribed Capital 33,524 34,203 33,600 57,300 100,230 100,424

AfDB Summary Financial Information

* Cumulative Exchange Adjustment on Subscriptions

Note: Data converted from UA (SDR) to USD at period-end exchange rates of each year

30

Safeguarding the sustainability of operations

Optimize utilization of risk capital while supporting the Bank's AAA rating

Risk Class AfDB Internal Rating

Moody’s Equivalent

Sovereign Risk Charges

Non-Sovereign Risk Charges

Senior secured Unsecured

Very Low Risk

1+ A1 and above 0.6% 1.7% 2.0%

1 A2 0.8% 2.3% 2.7%

1- A3 1.5% 4.4% 5.1%

2+ Baa1 2.4% 6.9% 7.9%

2 Baa2 3.3% 9.4% 10.9%

2- Baa3 4.9% 15.0% 17.3%

Low Risk

3+ Ba1 10.8% 21.6% 25.0%

3 Ba2 13.0% 25.6% 29.6%

3- Ba3 15.5% 29.3% 33.8%

Moderate Risk

4+ B1 18.5% 33.1% 38.2%

4 B2 20.2% 35.0% 40.4%

4- 22.1% 38.3% 44.1%

5+ B3 49.3% 42.7% 49.3%

5 55.2% 47.8% 55.2%

High Risk

5- Caa1 60.4% 52.4% 60.4%

6+ 65.8% 57.0% 65.8%

6 Caa2 100.0% 61.6% 71.1%

6- 100.0% 65.8% 76.0%

Very High Risk

7 Caa3 100.0% 71.2% 82.2%

8 100.0% 72.0% 83.1%

9 Ca 100.0% 100.0% 100.0%

10 C 100.0% 100.0% 100.0%

Credit risks related to lending activities are

managed through integrated policies,

guidelines and procedures, and is

based on a systematic assessment of the

credit mapped to an internal rating scale

31

Careful management of development-related exposure

• Non-sovereign risk rating derived on the basis of several pre-

determined critical factors including overall financial strength,

industry outlook, competitive position, management strength

and host country risk rating

• WARR of 3.58 at the end of December 2013

Sovereign Portfolio risk profile

0%

20%

40%

60%

80%

100%

2008 2009 2010 2011 2012 2013

very low risk low risk moderate risk high risk very high risk

0%

20%

40%

60%

80%

100%

2008 2009 2010 2011 2012 2013

very low risk low risk moderate risk high risk very high risk

Non-Sovereign Portfolio risk profile

Note: In 2011, the Bank changed from a 10 point rating scale to a 22 point scale that allowed more granularity

• Sovereign risk credit rating derived from an assessment of

macroeconomic performance, debt sustainability, socio-

political factors, business environment and the Bank’s

portfolio performance

• WARR of 2.73 at the end of December 2013

32

Expanded capacity to assume core business risks

Growing capital base …

(in USD million)

Capital usage focused on development activities

33

2008 20092010

20112012

2013

3,814 4,002 4,047 3,893 4,108 4,581

3,365 3,431 3,377 3,600 4,100 4,400

Paid-in capital Reserves

7,433 7,424 7,494 8,207 8,981

(in USD million)

8,818

3,383

3,159

949

788 420

80 276 - 239

Risk Capital Sovereign LoanRisk

Non-SovereignLoan Risk

Equity Risk Treasury Risk Operational Risk Benfit Plan Risk Diversification Available RiskCapital

7,179

7,933

9,928 10,213 11,728

13,225 14,077

963

2,519 2,769

3,219

4,193 4,654

2.8 2.6 2.3

2.7 2.7 3.0

2008 2009 2010 2011 2012 2013

Sovereign Portfolio Non-Sovereign Portfolio

Weighted Average Risk Rating

8,896

12,447 12,983

14,947

17,418 18,731

Target rating of 3 to 4 *

(in USD million)

* Equivalent to Moody’s Ba1 to B2

…allowing for greater support to Africa

Safeguarding stakeholders interests

2008 2009 20102011

20122013

41% 60%

58% 60% 58% 62%

2008 2009 20102011

20122013

60%

86% 84%

55% 50%

48%

Strong capitalization Conservative leverage

Prudential Limit (100%)

Risk Capital Utilization Rate = Σ ((Exposure) x (Risk capital charge)) / Total risk capital

Usable Capital = Σ (Paid-in capital, Reserves, Callable capital of non-borrowing countries rated A- and above)

Risk Capital Utilization Rate Debt to Usable Capital

Prudential Limit (100%)

Annual paid-in capital from GCI-6 will range from USD 467 million to USD 72 million from 2014 to 2023 34

Financial policies that mitigate non-core risks

• Mitigate counterparty credit risk through minimum credit ratings and exposure limits and collateral exchange agreements for derivatives

• Match the currency composition of assets with that of liabilities and hedge the net asset position to minimize currency translation risk

• Prohibited from taking direct FX exposure

• Protect the Bank’s net interest margin from fluctuations in interest rates

• Matching the characteristics of assets with liabilities

• Minimizing liquidity risk by holding one year of liquid resources at all times

• COSO internal framework to regularly evaluate the effectiveness and efficiencies of the internal controls of significant business operations

Counterparty Credit Risk Currency Risk

Interest Rate Risk Liquidity Risk

Operational Risk

35

5% 1% 4%

90%

0%

20%

40%

60%

80%

100%

• Our investment philosophy: capital preservation, liquidity and reasonable returns

• Investment strategy adapted to market conditions to strengthen credit quality and improve liquidity profile of investment portfolio while limiting volatility of returns

• Strong performance in 2013

Prudence and performance in the midst of financial turmoil

As of 31 December 2013

Fair value portfolio: USD 4.6 billion

Amortized cost portfolio: USD 4.8 billion

Liquid assets to meet operational needs of the Bank

6% 8%

30%

51%

5%

0%

20%

40%

60%

Prudent investment strategy

Longer term assets to stabilize Net Interest Margin

USD 50%

EUR 36%

GBP 12%

Other 2%

36

Treasury investments aligned with ALM guidelines

As of 31 December 2013

As of 31 December 2013

Investment portfolio exposure

Defensive asset mix targeting top quality investments

52%

43%

5%

0%

20%

40%

60%

AAA AA A and below

AfDB’s exposure by country

0.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

AAA AA A BBB+ and below

(in USD million)

37

As of 31 December 2013

As of 31 December 2013

Building Africa, maintaining financial strength

Allocating income

Ensuring financial sustainability and resilience to shock

Guiding principles of net income allocation

• 52% of allocable income retained in reserves

for 2012 against 46% in 2011

• Goal is to maintain risk capital utilization rate below

100% limit over the 10-year planning horizon

• First priority to reserves

• Distribution to fulfill mandatory commitments:

ADF USD 54 million and DRC USD 96 million

• Surplus account with clear criteria for prioritization,

use limited to high impact development initiatives

123 141 169 137 177

251 190 159 158

150

37 44 36 13

411 375 364

295 339

2008 2009 2010 2011 2012

Allocable income

Reserves Development Initiatives Surplus Account Allocable Income

(in USD million)

Building up reserves while supporting development initiatives

ADF

Fragile States Facility

African Water Facility

Africa Food Crisis Response

Special Relief fund Investment

Climate Facility

NEPAD African Legal

Support Facility

African technical assistance centers

Africa Capacity Building Foundation

Dem. Rep. of Congo Debt Relief

Distribution to initiatives with the highest development impact, consistent with the Bank’s strategic objectives.

38

AfDB

(Aaa/AAA)

ADB

(Aaa/AAA)

IADB

(Aaa/AAA)

IBRD

(AAA/Aaa)

Shar

eho

lder

s’

Sup

po

rt

Average rating of shareholders A- A+ A- A

Average rating of key shareholders A AA A AA

Share of 'AAA'-'AA' callable capital (%) 28.7 47.1 42.8 48.0

'AAA'-'AA' callable capital /debt (%) 130.1 113.5 73.2 62.2

Cap

ital

isat

ion

Equity to asset (%) 25.2 13.2 22.0 10.8

Paid-in to subscribed capital (%) 7.4 5 4 6.0

Debt to equity (%) 248.75 396.25 321.3 406.3

Ris

k

Average rating of loans & guarantees BB+ BBB- BB BBB-

Impaired loans/gross loans (%) 1.17 0.04 0.4 0.3

Share of non-sovereign exposure (%) 24.86 11.43 6.5 0.0

Equity stakes/(loans + equity stakes) (%) 3.82 1.76 0.0 0.0

Five largest exposure/total loans (%) 64.37 80.25 66.6 44.8

Share of 'AAA'-'AA' treasury assets (%) 88.0 49.5 82.0 78.5

Financial ratios compare favorably to peers

39 Source: Fitch (16 August 2013)

Financial ratios compare favorably to peers (contd.)

40

Source: Moody’s (30 September 2013)

Liquid Assets (Cash + Investments) as a % of Total Assets (as of December 2012)

Usable Capital + Callable Capital of Aaa/Aa Members a % of Risk Assets (as of December 2012)

3 Capital Market Activities

41

The African Development Bank

Financing development through bond issuance

Funding in line with operations

Raising cost effective funding for the benefit of African nations

Capital market resources within and outside the continent to fulfill the Bank’s mandate

Leveraging its AAA rating to attract cost effective resources to support Bank operations

2014 borrowing program of USD 4.7 billion

42

2010 2011 2012 2013 2014*

2,770

3,772 3,844

5,596

2,698

2,011

(in USD million)

Actual Borrowing Limit

* Amount raised as of 30 April 2014

Tapping into diversified funding sources

Swapped to meet disbursements and for asset/liability management purposes

Public Domestic

Issue 16.3% Global

61.1%

Private Placement

6.8%

African Currency

Linked 2.1%

Uridashi 4.6%

Green Bond 9.0%

African Domestic

Issue 0.1%

2013 issuance by market segment

43

2013 issuance by currency

AUD 16.3%

BRL 4.1%

CLP 1.5%

GHS 2.1%

MXN 1.6%

TRY 0.1%

UGX 0.1%

USD 74.3%

Consistent presence in the US dollar global benchmark market

AfDB bonds, safety with yield

USD 2.175 billion 0.875% due March 2018

Distribution by investor type

Asset Managers 7%

Banks 23%

Central Bank / OIs* 67%

Corporates 3%

Africa Americas Asia Europe Middle East

11%

29%

41%

14%

5%

• Priced at 20.45 bps over US Treasuries • Latest re-opening at 12.1 bps over US Treasuries

*Official Institutions

44

Distribution by region

USD 1 billion 0.875% due May 2017

Distribution by investor type

Asset Managers 19%

Banks 14%

Central Bank / OIs* 67%

Africa Americas Asia Europe Middle East

4%

32%

23%

37%

4%

• Priced at 22.85 bps over US Treasuries

Distribution by region

Outstanding Global benchmarks • US$ 1.125 billion due May 2014 • US$ 1 billion due Mar 2016 • US$ 1.25 billion due Sep 2016 • US$ 1.7 billion due Mar 2017

• US$ 1 billion due May 2017 • US$ 2.175 billion due Mar 2018 • US$ 1 billion due October 2018

Inaugural syndicated US dollar Green Bond in 2013

45

USD 500 million 0.75% Green Bond due October 2016

Americas Asia EMEA

52%

9%

39%

Distribution by region

Oversubscribed with 84% bought by investors motivated by the green format including: • Third Swedish National Pension Fund • AP4 • BlackRock • California State Teachers’ Retirement System

(CalSTRS) • Calvert Investment Management • Nordea Investment Management • Pictet Asset Management • Praxis Intermediate Income Fund • State Street Global Advisors (SSgA) participating in

buying the bond for their High Quality Green Bond Fund

• TIAA-CREF • Trillium Asset Management

• Priced at 15.5 bps over US Treasuries and MS+5 bps

Examples of eligible projects

• Morocco: Africa’s largest Concentrated Solar Power Plant • South Africa: Eskom Sere Wind Farm – tapping into vast wind

potential • Morocco: ONE Integrated Wind/Hydro Energy Program • Zambia: Itezhi-Tezhi Hydro Generation Project – innovative PPP

structure • Cape Verde: Wind power drives public-private collaboration in

Cape Verde

• In February 2014, the Bank launched its second Green Bond

o SEK 1 billion 5-year FRN o Priced at 3m Stibor flat

• In March 2014, the Bank launched its third Green Bond o SEK 1 billion 5-year fixed-rate note o Priced at MS flat

Growing presence in the Australian Kangaroo market

46

Largest ever AfDB Kangaroo issue AUD 1,000 million 5.25% due March 2022

Insurance Companies

15%

Central Banks/Ois

1%

Asset Managers

60%

Banks 24%

March 2012

Longest ever AfDB Kangaroo issue AUD 600 million 4.75% due March 2024

Insurance Companies

39%

Asset Managers

58%

Banks 3%

August 2013

Asia Japan Australia Europe Americas

52%

17% 23%

1% 7%

Japan Australia Europe Americas

46.9% 46.1%

0.3% 6.7%

Distribution by region Distribution by region

AUD is the Bank’s second funding currency

Distribution by investor type Distribution by investor type

Outstanding Kangaroo benchmarks • A$500 million due Jan 2016 • A$500 million due Jan 2018 • A$100 million FRN due May 2018

• A$250 million due Feb 2019 • A$1,000 million due Mar 2022 • A$525 million due Mar 2024

Bank’s first sterling deal since 1991

47

GBP 250 million 1.125% due December 2016

Central Bank/OIs

34%

Asset Managers

10%

Banks 48%

Institutions/Private Fund

6% Corporate

2%

Africa Americas Asia Europe UK/Ireland

2% 10% 10% 5%

73%

Distribution by region Distribution by investor type

• 3-year sterling benchmark bond

• Launched in January 2014 for an amount of GBP 250 million

• Priced at UKT 4% Sep 2016 + 35bps

o Tap by an addition GBP 100 million in April 2014

o Priced at UKT 4% Sep 2016 +

34bps

Satisfying individual Japanese investors’ appetite for Socially Responsible Investments

48

In line with our core operational priorities

An amount equal to the net proceeds are directed to finance projects in the respective fields on a ‘best-efforts’ basis

AUD 63mn due Nov 2014 (Water bond)

BRL 515mn due Sep 2016 (Education)

ZAR 22.6mn due Mar 2017

(Education)

TRY 128mn due Mar 2015

(Education)

BRL 37mn due 2017

(Clean Energy)

AUD 10mn due 2020

(Clean Energy)

BRL 2.8mn due Mar 2017

(Education)

BRL 17mn due Mar 2018

(Education)

A natural issuer of African currency-linked bonds

49 Nearly USD 200 million issued since 2012 in Nigerian Naira, Uganda Shilling and Ghanaian Cedi

• Favourable growth story and macroeconomic fundamentals

• Triple-A rating enables the Bank to be an issuer of choice for emerging market investors

• Providing visibility to African countries among international investors

• Investors looking into Africa for opportunities

Strong strategic interest

Selected AfDB African currency-linked transactions

January 2014

NGN 1.63 Billion 10.85% due February 2015

April 2012

NGN 2.36 Billion 10.5% due April 2014

March 2013

GHS 68.25 Million due March 2018

December 2012

UGX 34.892 Billion 10.0% due Dec 2017

Key drivers

Prior transactions in African currencies

TZS

BWP

ZMK

KES

Multi-pronged approach to developing African capital markets

50

• Establishing local bond issuance programs

• Targeting selected African capital markets

The success of the Bank’s experience in Uganda sets the stage for further local market issuance in 2013

• ISDA+ Master Agreement signed with the International Finance

Corporation to facilitate local currency lending and bond issuance in Africa

• Enables bilateral collaboration on local currency issuance, enhances local currency funding capacity to support development projects

+ International Swaps and Derivatives Association

Major breakthrough in the capital markets of Uganda

Exploring domestic African capital markets

Expanding the Bank’s African lending currencies

Partnering with sister institutions

Ghana Kenya Nigeria

Tanzania Zambia

NGN

XOF

ZAR

XAF

GHS

UGX

ZMW

TZS

EGP

KES

Ugandan Shilling designated as one of the Bank’s lending currencies in September 2011

Fully placed domestically with

50% oversubscription

Bond proceeds kept in local currency to fund a domestic mortgage lender

Established a UGX 125 billion Medium Term Note program

Issued a 10 year, UGX 12.5 billion bond in July 2012, with coupon pegged at 85% of Uganda 2-year Treasury bond yield and to be

re-priced at 2-year intervals

Positioning closer to stakeholders

Demand for field presence is growing = Regional Resource Center

Japan

Tunisia (TRA)

Egypt

Uganda

Malawi

Ghana

South Africa

Madagascar

Gabon

Mali

Nigeria

Tanzania

Zambia

Algeria

Ethiopia

Sudan

Kenya

Chad

Angola

Zimbabwe

Burundi

Togo CAR

Ivory Coast (HQ)

South Sudan

Mauritius Mozambique

Liberia Cameroon

Burkina Faso

Senegal

Sierra Leone

Rwanda DRC

Morocco

• Presence in 37 countries • 38% of operations staff

work from the field • 50% of projects managed

by field offices

Decentralization with delegation & safeguards

Opening of Customized Liaison Office in Mauritius and Asia External Representation Office in Tokyo

Increased field presence in Benin, Guinea (Conakry), Guinea Bissau,

Mauritania, and Sao Tome and Principe

• Better integration and oversight • Proactivity and responsiveness • Reduced procurement turn-

around time • Better utilization of resources • Reduced costs of doing business

51

One Bank directing its strength and capabilities towards Africa

52

Re-affirmed AAA rating

Strengthened risk-bearing capacity & resources level

Capacity to adapt and swiftly address emerging challenges in line with core priorities

Building on expertise and achievements to meet the needs of clients

Providing valuable policy advice and technical assistance to support

development efforts

A catalyst for development finance and solutions

Setting the continent on the path to greener, more inclusive growth, cutting across national borders and

led by a vibrant private sector

Africa’s Preferred Partner

The trusted partner for Africa’s development

53

“…the best advocate for Africa in achieving the MDGs.” Her Excellency Ellen Johnson Sirleaf, President of Liberia, 2013

“African Development Bank has become the darling of all of us in Africa.”

His Excellency Olusegun Obasanjo, Former President of Nigeria, 2012

“Nous sommes confiants que cette institution saura, grâce à la mobilisation de toutes ses compétences, préserver ses acquis et assurer son avenir avec plus d'optimisme et avec davantage de

rayonnement à l'échelle continentale et internationale.” His Majesty Mohammed VI, King of Morocco, 2012 Her Excellency

Ellen Johnson Sirleaf President of Liberia

His Excellency Olusegun Obasanjo

Former President of Nigeria

“AfDB has been Africa’s dependable partner in development since its establishment in 1964.”

His Excellency Jakaya Mrisho Kikwete, President of Tanzania, 2012

His Excellency Jakaya Mrisho Kikwete

President of Tanzania

His Majesty

Mohammed VI King of Morocco

www.afdb.org

afdb@afdb.org Investor Contact: FundingDesk@afdb.org

+(216) 71 10 39 00 +(216) 71 35 19 33

More information on the Bank Group is available at www.afdb.org

• Financial and Operational Analysis

• Documentation for Debt Programs

• Rating Agency Reports

• Financial Products for Borrowers

• Annual Report

afdb_acc AfDB_Group African

Development Bank Group

54

Appendix 4

55

AfDB: Income statement (UA million)

1 UA = 1 SDR = 1.54027 USD (2008) = 1.56769 USD (2009) = 1.54003 USD (2010) = 1.53527 USD (2011) = 1.53692 USD (2012) = 1.54000 USD (2013)

As of 31 December 2013 2012 2011 2010 2009 2008

Operational Income and Expenses

Income from Loans 335.01 351.16 314.92 293.36 288.24 352.28

Income from Investments and Related Derivatives 126.45 197.65 168.85 219.22 222.96 202.88

Income from Others Debt Securities 3.95 4.83 5.41 6.74 7.68 9.29

Total Income from Loans and Investments 465.41 553.64 489.18 519.32 518.88 564.45

Interest and Amortized Issuance Costs (302.99) (356.41) (316.82) (303.04) (306.32) (251.83)

Net Interest on Borrowing-Related Derivatives 111.85 139.16 112.16 126.27 73.28 (65.79)

Unrealized Gains/(Losses) on Fair-Valued Borrowings and Related Derivatives

92.50 (30.45) (13.00) (27.61) 17.38 12.43

Unrealized Gains/(Losses) on Non Fair-Valued Borrowings and Others (58.39) 20.28 9.96 (13.33) (20.30) (16.68)

Provision for Impairment on Loan Principal and Charges Receivable (41.14) (29.69) (17.68) (26.76) (11.29) 163.28

Provision for Impairment on Equity Investments 0.76 (0.05) (0.15) (0.90) (2.32) (18.46)

Provision for Impairment on Investments 9.19 0.29 6.39 18.58 3.39 (38.13)

Translation (Losses)/Gains 13.33 (2.27) (27.95) 4.87 19.63 (9.17)

Other Income 12.46 15.29 4.46 (1.72) 7.34 18.65

Net Operational Income 302.98 309.79 246.55 295.66 299.67 358.75

Administrative Expenses (110.97) (104.64) (79.50) (75.00) (63.06) (46.78)

Depreciation – Property, Equipment and Intangible Assets (6.70) (4.59) (4.47) (4.59) (4.68) (5.20)

Sundry (Expenses)/Income (4.98) (1.94) 1.93 (2.41) (0.77) (2.11)

Total Other Expenses (122.65) (111.17) (82.04) (82.00) (68.51) (54.09)

Income Before Distributions Approved by the Board of Governors 180.33 195.72 164.51 213.66 231.16 304.66

Distributions of Income Approved by the Board of Governors (107.50) (110.00) (113.00) (146.37) (162.68) (257.30)

Net Income for the year 72.83 88.62 51.51 67.29 68.48 47.36 56

AfDB: Balance sheet highlights (UA million)

1 UA = 1 SDR = 1.54027 USD (2008) = 1.56769 USD (2009) = 1.54003 USD (2010) = 1.53527 USD (2011) = 1.53692 USD (2012) = 1.54000 USD (2013)

As of 31 December 2013 2012 2011 2010 2009 2008

Assets

Due from Banks 954.13 881.45 344.16 395.72 318.83 592.64

Demand Obligations 3.80 3.80 3.80 3.80 3.80 3.80

Treasury Investments 6,085.45 6,487.51 7,590.47 7,433.53 7,412.25 4,575.76

Derivative Assets 985.96 1,558.33 1,696.68 1,421.48 764.00 736.09

Non-Negotiable Instruments on Account of Capital 1.20 1.97 3.04 4.62 8.19 11.86

Accounts Receivable 843.86 762.67 914.85 1,341.66 924.16 649.01

Outstanding Loans 11,585.84 11,014.31 9,373.52 8,293.01 7,538.20 5,834.62

Hedged Loans- Fair Value Adjustment 32.49 86.85 49.87 - - -

Accumulated Provision for Impairment on Loans (145.14) (128.51) (118.03) (114.21) (101.92) (102.64)

Equity Participations, Net 525.01 438.56 309.76 272.24 234.48 188.78

Other Debt Securities 82.90 76.54 79.99 79.75 70.81 68.80

Other Assets 41.22 31.06 13.34 12.69 11.89 12.23

Total Assets 20,996.72 21,214.55 20,261.45 19,144.29 17,184.69 12,570.95

Liabilities, Capital and Reserves

Accounts Payable 1,246.11 2,083.07 1,974.68 2,015.04 1,385.68 843.12

Derivative Liabilities 971.85 512.60 502.29 328.30 477.12 360.30

Borrowings 12,947.44 13,278.80 12,902.96 11,980.56 10,580.64 6,707.28

Capital Subscriptions Paid 3,147.08 2,839.48 2,505.97 2,355.68 2,350.26 2,345.81

Cumulative Exchange Adjustment on Subscriptions (172.65) (166.82) (160.63) (162.57) (161.97) (161.03)

Reserves 2,856.88 2,667.44 2,536.18 2,627.28 2,552.96 2,475.47

Total Liabilities, Capital and Reserves 20,996.72 21,214.55 20,261.45 19,144.29 17,184.69 12,570.95

57

Disclaimer

This presentation has been prepared by the African Development Bank (“AfDB”) for information purposes only. Any opinions expressed in this presentation reflect the judgment of AfDB at the date and time hereof and are subject to change without notice and AfDB has no obligation to inform any recipient when opinions or information in this presentation change. The AfDB makes no representation, warranty or assurance of any kind, express or implied, as to the accuracy or completeness of any of the information contained herein. This presentation is not an offer for sale, or a solicitation of an offer to buy, any notes or other securities of AfDB. It does not take into account the particular investment objectives, financial situations, or needs of individual investors. The price and value of the investments referred to in this presentation may fluctuate. Past performance is not a guide to future performance and future returns are not guaranteed. Each recipient of this presentation is deemed to acknowledge that this presentation is a proprietary document of AfDB and by receipt hereof agrees to treat it as confidential and not disclose it, or permit disclosure of it, to third parties without the prior written consent of the AfDB. All content (including, without limitation, the graphics, icons, and overall appearance of the presentation and its content) are the property of the AfDB. The AfDB does not waive any of its proprietary rights therein including, but not limited to, copyrights, trademarks and other intellectual property rights.

58