Africa’s leading infrastructure development finance institution, Africa Finance Corporation (AFC) has a loan facility from the Export-Import Bank of China (CEXIM), including a $200 million 5-year loan and a $100 million 5-year stand-by facility for general corporate purpose. This is the first time the multilateral finance institution will take up a financing facility from China.
The facility is expected to provide medium-term liquidity and 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).
According to AFC‘s President and Chief Executive Officer, Samaila Zubairu “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.”
Established in 2007, the African investment multilateral finance institution has an equity capital base of $1 billion. It was established to be the catalyst for private sector-led infrastructure investment across Africa.
Currently, AFC is the second highest investment grade rated multilateral financial institution in Africa with an A3/P2 Stable Outlook, according to ratings from Moody’s Investors Service. The corporation provides infrastructure services for sectors of power, natural resources, heavy industry, transport, and telecommunications. To date, the Corporation has invested approximately $4 billion in projects within 28 countries across North, East, West and Southern Africa. Its newly found friendship with China is expected to see AFC support CEXIM’s Africa strategy.