AFC secures $300 million loan facility from Export-Import Bank of China

11 Oct 2018
Financial Nigeria


The loan facility will provide the AFC with medium-term liquidity and contingent funding support, which is important for liquidity risk management. 

Samaila Zubairu, President and CEO, Africa Finance Corporation

The Africa Finance Corporation (AFC), an infrastructure development finance institution in Africa, has announced the acquisition of a $200 million five-year loan and a $100 million five-year standby facility for general corporate purpose from the Export-Import Bank of China (China Eximbank).

According to a statement by the AFC released on Thursday, the loan facility will provide the AFC with medium-term liquidity and contingent funding support, which is important for liquidity risk management. It will also open up other financing and relationships with Chinese institutions.

The facility from China Eximbank is the first financing facility AFC has received from the People’s Republic of China. This follows the strategic focus of the AFC 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 and North America.

Under the agreement, the AFC will provide support for the Eximbank’s Africa strategy by giving advice on how they can optimise their loan book on the continent.

“This facility is not only a milestone for the AFC and its strategy for the Far East, but also marks a natural evolution in the growing financial sophistication of China in Africa,” said Samaila Zubairu, AFC’s President and CEO, who added that it is a necessary development required to accelerate Africa’s journey towards closing the infrastructure deficit.

In the last two decades, China has grown from a relatively small investor, to becoming one of Africa’s largest trading partners. According to the American Enterprise Institute, a think tank based in Washington, D.C., Africa is the third-largest destination for Chinese investment behind Asia and Europe. And one-quarter of all Chinese investment in the continent is concentrated in Nigeria and Angola with 17 percent and 8 percent, respectively.

“We look forward to lending our expertise on how best to deliver sustainable infrastructure investment that should catalyse industrial growth on the continent,” said Zubairu.

The AFC currently has 25 shareholders. The private sector owns about 58 percent of its share capital, while the remaining 42 percent is owned by the Central Bank of Nigeria.

Established in 2007 with an equity base of $1 billion, the AFC serves as a catalyst for private sector-led infrastructure investment across Africa. Currently with a $4.2 billion investment portfolio, the AFC has the second-highest investment grade rating of multilateral financial institutions in Africa from the Moody’s Investors Service with an A3/P2 international credit rating which shows stable outlook.

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