East African Development Bank is a pioneer for African Development Finance Institutions

At 50 years old, the East African Development Bank has out-lived most of the population of it’s member states (Kenya, Rwanda, Tanzania and Uganda). Indeed, given the median age of the population in EADB’s member states is below 30, the East African Development Bank was born in the same generation as many of East Africa’s grandparents today.
Like East Africa’s grandparents, the East African Development Bank has seen the region’s vibrant history, including the immediate aftermath of independence from British colonial rule, regional and civil wars, droughts, regional and international economic crises, but also the evolution of democracy, regional economic diversification and the discovery of natural resources in all EADB member states.
Throughout the changing historical landscape, EADB has demonstrated both stability and steadiness to serve its member states, but also flexibility to meet its member states changing requirements and priorities. EADB’s initial focus was solely upon industrialization, which was deemed necessary to stimulate import substitution and export promotion, to create jobs and alleviate poverty and which was necessary to achieve EADB’s first mission to promote industrial development, reduce industrial imbalances between member states and enhance regional industrial complementarity. Over time, EADB has evolved and widened its focus to include agriculture, which today remains the backbone of East Africa’s economy and main source of employment and thus income generation for the majority of the population; and later tourism, which promotes economic diversification and foreign exchange generation. More recently, EADB’s focus areas up to 2020 include climate change, food security, infrastructure, skills development and regional integration, which we believe are the most import sectors to achieve our mission to promote sustainable socio-economic development in East Africa by providing development finance, support and advisory services.
EADB’s flexibility to the changing social, political and economic environment can also be demonstrated by our innovative behavior, pioneering East Africa through many first-time activities, as presented below.

First regional bank in Africa
First and foremost, EADB was actually the first regional bank to be established in Sub-Saharan Africa; initiated in 1967, soon after all of it’s initial member states (Kenya, Tanzania and Uganda) had achieved independence from British colonial rule.
EADB’s longer history than it’s peers, including large regional institutions such as the Banque Ouest Africaine de Développement (West African Development Bank, BOAD) has perhaps allowed EADB to act as a pioneer in many areas of development finance throughout it’s vibrant 50-year history. Furthermore, EADB’s long standing has also endowed the Bank with greater stability than many of it’s peers. EADB has weathered the breakdown of the East African Community in 1977 and has continued to successfully offer development finance throughout the region under the new East African Community that was established in 1999.
EADB’s first loans were issued in 1969 to Agricultural Enterprises Ltd and the Industrial and Commercial Development Corporation, in line with EADB’s mandate to drive industrial development.
First EAC institution to get an independent charter
Linked to the above, and because EADB survived the collapse of the former East African Community, EADB was also the first EAC institution to receive a charter independent of a REC.
In 1967, when EADB was established, EADB was governed under the Treaty of the EAC. However, following the dissolution of the EAC in 1977, EADB was given it’s own charter in 1980 in order to continue to serve the East African population. More recently, amendments to the Charter have enabled Rwanda to join EADB and have expanded EADB’s operational scope, allowing a wider range of financial instruments to provide development finance to the EAC economies.

First EAC institution to have an advisory panel
EADB’s advisory panel was established in 1981 under the guidance of Lars Ekengren. In the early 1980s, East Africa suffered from a severe foreign exchange shortage, which also affected EADB through its limited ability to buy hard currency to repay international loans.
As a result, Lars Ekengren (the then Director General) established an extremely respectable and distinguished advisory panel to cement EADBs reputation as a secure and international development finance institution. EADB’s first ever advisory panel consisted of Rudolph Peterson (former Chairman of Bank of America), Michael von Clemm (Chairman of Credit Suisse First Boston), Lars Kalderén (voted 1981 “Borrower of the year” by Euromoney), Mahesh Kotecha (Vice President of Standard and Poor’s) and Bob McNamara (former President of the World Bank). The advisory panel first met at the 1981 Annual Meetings of the World Bank Group and, alongside the Governing Council, agreed on a path to develop EADB into an important institution to serve East Africa. Indeed, under the advisory panel and leadership at the time, EADB’s loan book grew from UGX 5 million in 1979 to UGX 202 million by 1983.
Today, EADB’s advisory panel continue to nurture EADB’s respectable international rating, which in turn will allow the institution to further grow development impact. Lars Ekengren (the Director General who established EADB advisory panel) now sits on the advisory panel alongside Mr. Mahesh K. Kotecha (Former Managing Director of Capital Markets Assurance Corporation, New York and Asia and former Managing Director of Mbia Insurance Corporation), Mr. Toyoo Gyohten (President of the Institute for International Monetary Affairs, Japan and Senior Adviser for the Bank of Tokyo and Mitsubishi Limited) and Jannik Lindbaek (Former Executive Vice President and CEO of the International Finance Corporation).
First East African bond issuer
EADB was the first institution to issue a corporate bond in East Africa and launched the stock exchanges in all of its member states. EADB’s first corporate bond was launched on the Nairobi Securities Exchange in 1996 and was worth KES 820 million. Thereafter, EADB opened the Uganda Securities Exchange in December 1997 with a corporate bond worth UGX 10 billion, and opened the Dar es Salaam Stock Exchange in December 2000 with a corporate bond worth TZS 10 billion.
Thereafter, EADB embarked on a series of bond launches, throughout Kenya, Tanzania ad Uganda, which undoubtedly drove financial sector deepening through initiating capital markets in East Africa. In the future, EADB intends to resume its bond issuance and raise climate finance through many of the green funds that have become available for developing countries to contribute towards climate change adaptation and mitigation following the Paris agreement.
Following the launch of corporate bonds in EADB member states, EADB’s openness to innovate new financial instruments continued; and throughout the 2000s EADB introduced asset leasing, equity, loan guarantees and many other development-enhancing financial instruments to the East African economies.

First East African institution to get an investment grade rating
In 2015, EADB was the first East African owned institution to obtain an investment grade rating of Baa3 by Moody’s Investors Services.
A significant improvement in the bank’s capital buffer, due to a material increase in paid-in capital by the bank’s shareholders, and a sharp decline in non-performing loans, as a result of the Bank’s sustained efforts to restructure its balance sheet, improved EADBs rating on its long-term foreign currency debt from Ba1 to Baa3 – investment grade.
The positive rating has enhanced EADB’s capacity to mobilise low-cost, long-term financing, which in turn has expanded EADB’s ability to invest in projects that will benefit the region’s socio-economic development and regional integration.
First institution to bring many other international development organisations to East Africa
Related to the above, EADB has also evolved in how it raises funds since its inception 50 years ago. In 1967, EADB was instated by its founding fathers, the Presidents of Kenya, Tanzania and Uganda: Jomo Kenyatta, Julies Nyerere and Milton Obote respectively, who all pledged public capital in return for equity stakes in the East African Development Bank. Within two years, EADB had already attracted private sector shareholders: National & Grindlays Bank (later Standard Chartered Bank) became EADB’s first Class B Shareholder in 1969, followed by the African Development Bank (AfDB), Commercial Bank of Africa (CBA), Barclays Bank, and a consortium of Yugoslav institutions also become class B shareholders who all became class B shareholders in 1970.
Today, EADB’s shareholders include commercial banks and international and national development finance institutions. In addition to the early shareholders mentioned above, the Netherlands Development Finance Company (FMO), German Investment and Development Company (DEG), SBIC-Africa Holdings and Nordea Bank of Sweden are all EADB shareholders.
Further, EADB has raised vast sums of capital through lines of credit from a wide array of development finance institutions and through issuing corporate bonds.
Indeed, EADB has introduced many of our partnering development finance institutions to East Africa for the first time. For example, our first line of credit with BADEA, signed in 2016, represents the first time that BADEA has invested in the East African economies.
Other examples include some of our CSR programmes, where EADB partners with international experts in our decided field of intervention to benefit the population of East Africa.
One programme, the ‘Internal Business Transactions – Negotiations and Drafting Course’ brings DLA Piper (an international private sector law firm) to East Africa to train public sector lawyers and judges across the region to better shape policies related to natural resources. Another programme, the ‘Medical Training and Fellowships Programme’ partners with the British Council (the UK’s international organisation for educational opportunities and cultural relations) and the Royal College of Physicians (a British professional body dedicated to improving medical practice) to train 600 East African doctors and lawyers in the fields of oncology and neurology. The programme is the first to bring the Royal College of Physicians to East Arica. Finally, the ‘STEM Scholarship’ partners with the Africa-America Institute, who in turn collaborate with Rutgers University to provide Masters Degrees to East African teachers and lecturers in the fields of science, technology, engineering and mathematics. Again, the programme is the first to partner Rutgers University with East Africa.

At EADB, we are extremely proud of what we have achieved in the past 50 years since 1947. However, our ambitions for the next 50 years are even greater. We hope to contribute to massive infrastructure development throughout the region, particularly in green infrastructure investments, which will also promote regional integration, and to mobilise public-private-partnerships to increase the efficiency of our investments. And more generally, we hope to become a driver of projects that support climate change mitigation and adaptation given the growing importance of global green growth. Finally, we will continue to invest in the human capital of East Africa, through supporting projects and additional tailor-made training sessions that develop certain aspects of our labour force under our comprehensive corporate social responsibility programme. It is our dream that all of our member states achieve their ambitions to become middle-income countries before another 50 years passes.