The African Development Bank (AfDB) on Tuesday said it had launched its second Uganda-shilling-denominated bond on the local capital market and plans to launch two more in Nigeria and Zambia in the coming months.

The UGX 12.5 billion ($4.8 million) bond – as the bond is popularly known – had been opened for subscription until yesterday.

According to the AfDB, this is the newest issuance under the UGX 125 billion ($4.8 million) Medium-Term Note (MTN) Programme initially founded in the middle of last year.

The AfDB’s reappearance to the Ugandan capital mart reveals the state of local demand for more debt tools.

It also shows the necessity for local currency financing to drive infrastructure and other projects.

Pierre Van Peteghem, the Bank Group Treasurer, said this issuance is seen as just the start of his department’s drive to make local currency more available to private sector customers.

“The Bank has recently approved an additional five African currencies including the Ghanaian Cedi and the Franc CFA for both West and Central African zones as official lending currencies of the Bank. This brings the total number of African currencies in which we can on-lend to clients to 10,” Peteghem said.

“This will enable us to better respond to client needs, particularly with respect to mitigating foreign exchange risk posed by hard currency loans. We believe by directly issuing local currency bonds, we also play a key role in developing the local capital market.”

The AfDB is set to start two new MTN local currency programmes in Nigeria and Zambia in the coming months, the development finance institution (DFI) said in a statement.