AFC Secures $1.16 Billion to Address Africa’s Infrastructure Deficit

The Africa Finance Corporation (AFC), a top provider of infrastructure solutions in Africa, has reached a significant milestone in its mission to develop the continent.

On March 26, 2024, AFC announced the successful close of its largest ever debt facility, a record $1.16 billion syndicated loan.

This huge capital injection marks a big leap forward in the resolution of the perennial infrastructural gap in Africa, a critical obstacle for achieving the full potential of the continent.

A syndicated loan structure is one that pools resources from several lenders into one large loan, which is then offered to the borrower; AFC being the borrower in this case.

The approach provides access to diverse funding sources and ensures competitive interest rates for AFC.

The loan itself was very popular, with subscriptions reaching as high as 49% above its initial target of $1 billion.

This level of oversubscription highlights very strong international investor confidence in AFC’s track record, creditworthiness, and capacity to steer through the complexities of the global economic environment.

A Landmark Deal with Global Backing

The landmark deal was officially closed at a ceremony in Dubai.

A broad range of financial institutions across the globe and particularly prominent players from the Middle East, Europe, and Asia have participated in this loan.

The geographically diverse investor base is a clear indicator of Africa’s expanding international visibility as well as the critical role played by AFC in sustainable infrastructure development across the continent.

The structuring and facilitation of the loan involved several key institutions.

First Abu Dhabi Bank, Mashreqbank, MUFG Bank, and Standard Chartered acted as Global Coordinators, thereby demonstrating their dedication to Africa’s development agenda.

Furthermore, Industrial and Commercial Bank of China (London Branch) assumed the role of China Coordinator, which further ensured that Asian investors were well represented in this vital initiative.

The consortium of several renowned financial institutions, such as Abu Dhabi Commercial Bank, Emirates NBD Bank, Mizuho and Sumitomo Mitsui Banking Corporation, acted as the Initial Mandated Lead Arrangers and Bookrunners and played an important role in syndicating the loan, which made it possible to complete the project.

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Investing in Africa’s Future

The $1.16 billion secured by AFC will be prudently deployed to finance critical infrastructure projects in Africa.

These projects cover various sectors like energy, transportation, communication technology, and water management, among others.

By investing in these key areas, AFC intends to fill the continent’s infrastructure gap, a major bottleneck to economic growth and development.

Enhanced infrastructure will not only improve connectivity for trade purposes but also provide new job opportunities and better access to essential services, thus fast-tracking overall economic development across Africa.

A Catalyst for Economic Transformation

Samaila Zubairu, the President and CEO of AFC, conveyed his deep satisfaction with the large number of responses to the loan.

He pointed out that the strong investor confidence is an indication of Africa’s promising growth prospects and also of the AFC’s pivotal role in driving economic expansion and industrialization across the continent.

Mr. Zubairu focused on AFC’s unchanged commitment to using infrastructure projects to catalyze local processing capacities, improve export earnings, and create jobs, thus moving Africa’s industrial sector forward.

The AFC’s record-breaking loan transaction marks a key milestone in Africa’s quest for a better future.

With this generous infusion of capital, the AFC can effectively close the continent’s infrastructure gap.

Through strategic investment in critical infrastructure projects, the AFC is creating a platform for long-term economic growth and social development in Africa.

This groundbreaking deal is a powerful symbol of international trust in Africa’s potential; it opens up a brighter future for Africa.