The Africa Finance Corporation has secured a €50 million (Fifty Million Euros) credit line provided by the Society for the Promotion and Participation for Economic Cooperation (Proparco) with the participation of European Financing Partners S.A (EFP). EFP S.A. is a private limited liability company, whose funding capacity is provided by the European Investment Bank (EIB) and by the following 12 European Development Finance Institutions : BIO (Belgium), CDC (United Kingdom), Cofides (Spain), DEG (Germany), Finnfund (Finland), FMO (the Netherlands), IFU (Denmark), Norfund (Norway), OeEB (Austria), Proparco (France), Sifem (Switzerland) and Swedfund (Sweden).
The Proparco – led line of credit has a tenor of 10 years and is a dual currency facility of Euros and US Dollars. The EFP tranche (€25 million) will be drawn in US Dollars and will be utilised to fund Nigeria and Anglophone Africa-based projects, while the Proparco tranche (€25 million and drawn in Euros), will support Euro-denominated investments with a focus on Francophone African countries.
The announcement follows AFC’s recent agreement to secure a US$60 million (Sixty Million US Dollars) joint facility from the German Investment and Development Corporation (DEG) and Netherlands Development Finance Company (FMO). These facilities form part of an on-going expansion of the AFC’s capacity to lend to value added infrastructure projects across the continent.
AFC, a multilateral finance institution, was established in 2007 with an initial capital base of USD1 billion, to be a catalyst for private sector infrastructure investment across Africa. AFC was established to help fill a critical void in providing project structuring expertise and risk capital to address Africa’s infrastructure development needs, and is increasingly being seen as the benchmark institution for private sector-led investment in the core infrastructure sectors of power, natural resources, heavy industry, transport and telecommunications.
Commenting on the lending facility, Andrew Alli President & Chief Executive Officer (CEO), AFC said “This facility is an important milestone for AFC and further enhances our ability to on-lend to infrastructure projects in Africa across diverse geographies and in a variety of currencies. The completion of this facility is a strong endorsement of our approach to investment on the continent by leading multilateral financial institutions. We are also very pleased to deepen our relationship with Proparco and the wider AFD group, as we jointly seek to expand our investment footprints across Africa, especially within the Francophone African countries.”
Marie-Hélène Loison, Deputy CEO of Proparco also commented “We are very pleased to be partnering with AFC. Following the successful completion of our due diligence process in November 2012, we went a step further to convert our initial discussion of bilateral funding into a club deal by bringing in members of the European Financing Partners (EFP) into the transaction. This partnership highlights Proparco’s strategy to finance investments that are economically viable, socially equitable, environmentally sustainable and financially profitable and we are delighted to be a partner to AFC.”
AFC is an African-led international financial institution, established in 2007 whose mission is to improve African economies by proactively developing and financing infrastructure, industrial and financial assets. AFC is involved as an investor, developer and financier of various infrastructure projects, and is gaining recognition as the benchmark institution for financing the development of infrastructure projects in Africa.
AFC’s current authorized share capital is US$2.0 billion with shareholders’ funds of US$1.2436 billion and a 2013 funding programme of US$700 million. To complement its shareholders funds and enhance its financing capacity, AFC has completed several other bilateral borrowings from other DFIs and international commercial banks including a landmark US$200 million funding facility from the African Development Bank. To execute its mandate, AFC has established partnerships regionally, with other institutions such as the African Development Bank, African Export-Import Bank, PTA Bank, Islamic Development Bank, Banque Quest Africaine de Developpement, the Nigerian Sovereign Investment Authority (NSIA); and Internationally with the China Africa Fund, the Infrastructure Development Finance Company of India (IDFC), FMO and the US Government through USAID in the US Presidential “Power Africa Initiative”.
AFC is the lead investor in the award winning Cabeolica project, a USD90 million, 26MW landmark renewable energy wind power project in Cape Verde. AFC is the Technical Adviser to the Central Bank of Nigeria (CBN) on the CBN’s USD2.0 billion Power and Aviation Intervention Fund (PAIF). AFC is a partner with Vigeo Holdings Limited and Tata Power Delhi Distribution Limited for the acquisition of power distribution assets, and a lead investor in the Kainji power generation plant in the current Nigerian Government power sector privatisation round. Additionally in Nigeria, AFC made investments to support marginal field operators in the up and mid-stream oil and gas sector companies such as Neconde, FHN and Seven Energy. AFC is also the lead investor in Cenpower Generation Company Limited (Cenpower), which is implementing the Kpone IPP project – a 340 megawatt combined cycle gas turbine power plant in Tema, Ghana.
AFC is the lead investor in the Main One fibre optic cable project, enhancing West Africa’s connection to Europe and the rest of the world through faster and more technologically advanced broadband capacity. AFC provided a USD50 million convertible debt investment in ARM Cement Limited (ARM), the second largest cement operator in Kenya to support expansion initiatives across Eastern and Southern Africa including; development and construction of a lime plant in Tanzania and expansion of ARM’s cement capacity in Kenya. The transaction marked AFC’s first bilateral investment in Kenya. AFC provided financing for Ethiopian airlines fleet expansion in the acquisition of Africa’s first Boeing 777 airline.
AFC also invested in the Bakwena toll road project in South Africa, and in the EURO 270 million Konan Bedie Toll Bridge in Côte d’Ivoire; the signature Transport PPP project in Francophone Africa, underscoring its interest in investing in PPPs/PFIs in its focal sectors across the African continent. AFC launched a landmark USD15 million project development facility with the Dutch Development Bank FMO in January 2013, to fund early-stage equity investments in projects under development pre-financial close, in the infrastructure sector across sub-Saharan Africa.
Proparco is a Development Finance Institution jointly held by Agence Française de Développement (AFD) and public and private shareholders from the North and South. Its mission is to catalyze private investment in emerging and developing countries with the aim of supporting growth, sustainable development and the achievement of the Millennium Development Goals (MDGs). Proparco finances investments that are economically viable, socially equitable, environmentally sustainable and financially profitable. Proparco is one of the main bilateral development finance institutions in the world. It invests on four continents encompassing the major emerging countries and the poorest countries, particularly in Africa, and has a high level of requirements in terms of social and environmental responsibility.
European Financing Partners S.A. (EFP) is an initiative created by the European Investment Bank (EIB) and the following 12 European Development Finance Institutions (EDFI) members: BIO (Belgium), CDC (UK), Cofides (Spain), DEG (Germany), FINNFUND (Finland), FMO (The Netherlands), IFU (Denmark), Norfund (Norway), OeEB (Austria), Proparco (France), SIFEM (Switzerland) and Swedfund (Sweden). The aim of the initiative is promoting sustainable development of the private sector in African Caribbean and Pacific Group of States (ACP) and strengthening co-operation between eligible EDFIs and the EIB. The EIB is acting on behalf of the European Community from the investment facility resources, signed in Cotonou, Benin on 23 June 2000.