One of the leading infrastructure development finance institution, Africa Finance Corporation (AFC) has successfully acquired a credit facility a $200m 5-year loan and a $100m 5-year stand-by facility from the Export-Import Bank of China (CEXIM). The acquired facilities which are for general corporate purposes, marks AFC’s inaugural financing facility from the People’s Republic of China (PRC).
Aside from the medium-term liquidity that the proposed facility is expected to provide, it will also 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,” the statement added.
Commenting on the development, Samaila Zubairu, President/CEO, AFC said in the last two decades, China has grown from a relatively small investor to becoming one of Africa’s largest trading partners.
“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.” Zubairu stressed.
Africa Finance Corporation (AFC) is a pan-African multilateral development finance institution established in 2007 to bridge Africa’s infrastructure investment gap through the provision of debt and equity finance, project development, technical and financial advisory services.
AFC is majority-owned by private investors, the bulk of which are African financial institutions, which own 47.6% of the corporation. A further 42.5% is owned by the Central Bank of Nigeria (CBN).