The Africa Finance Corporation (AFC), the leading infrastructure development finance institution in Africa has announced the successful acquisition of a loan facility from the Export-Import Bank of China (CEXIM) of a US$200m 5-year loan and a US$100m 5-year stand-by facility for general corporate purposes.
The facility from CEXIM marks AFC’s inaugural financing facility from the People’s Republic of China (PRC). This follows the Corporation’s strategic focus to build a broad coalition of investors by diversifying its fundraising activities to include all sources of institutional capital in East Asia, in addition to its existing partners in Europe & North America.
Apart from the medium-term liquidity that this proposed facility will provide, it will also further provide contingent funding support which is particularly important for liquidity risk management as well as opening up other financing and relationships with Chinese entities (both state-owned and private).
It has also been agreed that the signing of the facility agreement shall mark the first step into what will be a long and beneficial relationship with CEXIM, including AFC’s support to CEXIM’s Africa strategy, looking at their portfolio of assets and advising them on how to optimise its loan book on the continent.
Samaila Zubairu, President & CEO at AFC, commented: “In the last two decades, China has grown from a relatively small investor, to becoming one of Africa’s largest trading partners today.
“This facility is therefore not only a milestone for the Corporation and its strategy for the Far East, but also marks a natural evolution in the growing financial sophistication of China in Africa, a necessary development required to accelerate Africa’s journey towards closing the infrastructure deficit.
“Moreover, AFC welcomes CEXIM’s commitment towards its Africa strategy, and we look forward to lending our expertise on how best to deliver sustainable infrastructure investment that should catalyse industrial growth on the continent.”
AFC, an investment grade multilateral finance institution, was established in 2007 with an equity capital base of US$1 billion, to be the catalyst for private sector-led infrastructure investment across Africa. With a current balance sheet size of approximately US$4.2 billion, AFC is the second highest investment grade rated multilateral financial institution in Africa with an A3/P2 (Stable outlook) rating from Moody’s Investors Service. AFC successfully raised US$750 million in 2015 and US$500 million in 2017; out of its Board-approved US$3 Billion Global Medium-Term Note (MTN) Programme. Both Eurobond issues were oversubscribed and attracted investors from Asia, Europe and the USA.
AFC’s investment approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and risk capital to address Africa’s infrastructure development needs and drive sustainable economic growth. AFC invests in high quality infrastructure assets that provide essential services in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications. To date, the Corporation has invested approximately US$4 billion in projects within 28 countries across North, East, West and Southern Africa.