AFC Closes US$250m Syndicated Term Loan Facility

The Africa Finance Corporation (AFC) has signed a US$ 250 million syndicated term loan facility, marking its debut in the international syndicated loan market.

The facility, which was oversubscribed, has a tenor of 2 years and will be used to enhance the corporation’s ability to support investment and trade finance across the continent, in line with AFC’s establishment agreement and charter.

Citibank, FirstRand Bank, acting through its Rand Merchant Bank division, The Standard Bank of South Africa Limited and Standard Chartered Bank, acted as the Initial Mandated Lead Arrangers and Bookrunners.

AFC, a multilateral finance institution, was established in 2007 with an initial capital base of USD1 billion, to be a catalyst for private sector infrastructure investment across Africa.  AFC was established to help fill a critical void in providing project structuring expertise and risk capital to address Africa’s infrastructure development needs, and is increasingly being seen as the benchmark institution for private sector-led investment in the core infrastructure sectors of power, natural resources, heavy industry, transport and telecommunications.

Commenting on the loan facility Andrew Alli, president & chief executive officer, AFC said “This facility is a further endorsement of our approach to investment on the continent, following the completion of facilities with a number of multilateral financial institutions earlier this year. Enhancing our ability to on-lend to projects across Africa is core to our strategic objective to broaden our asset portfolio on the continent and we are extremely pleased at the level of interest expressed”.

AFC is an African-led international financial institution, established in 2007 whose mission is to improve African economies by proactively developing and financing infrastructure, industrial and financial assets.  AFC is involved as an investor, developer and financier of various infrastructure projects, and is gaining recognition as the benchmark institution for financing the development of infrastructure projects in Africa.

AFC’s current authorized share capital is USD2.0 billion with shareholders’ funds of USD1.24 billion and a 2013 funding programme of USD700 million. To complement its shareholders funds and enhance its financing capacity, AFC has completed several other bilateral borrowings from other DFIs and international commercial banks including; a landmark US$200 million funding facility from the African Development Bank; a USD60 million facility from the German Development Finance Instituion (DEG) and the Netherlands Development Finance Company (FMO); and a EURO 50 million facility from the Society for the Promotion and Participation for Economic Cooperation (PROPARCO) with the participation of European Financing Partners S.A (EFP).

To execute its mandate, AFC has established partnerships regionally, with other institutions such as the African Development Bank, African Export-Import Bank, PTA Bank, Islamic Development Bank, Banque Quest Africaine de Developpement, the Nigerian Sovereign Investment Authority (NSIA); and Internationally with the China Africa Fund, the Infrastructure Development Finance Company of India (IDFC), FMO and the US Government through USAID in the US Presidential “Power Africa Initiative”.

AFC is the lead investor in the award winning Cabeolica project, a USD90 million, 26MW landmark renewable energy wind power project in Cape Verde. AFC is the Technical Adviser to the Central Bank of Nigeria (CBN) on the CBN’s USD2.0 billion Power and Aviation Intervention Fund (PAIF).  AFC is a partner with Vigeo Holdings Limited and Tata Power Delhi Distribution Limited for the acquisition of power distribution assets, and a lead financier in the acquisitions of the Kainji and Ughelli power generation plants in the current Nigerian Government power sector privatisation round.

Additionally in Nigeria, AFC made investments to support marginal field operators in the up and mid-stream oil and gas sector companies such as Neconde, FHN and Seven Energy. AFC is also the lead investor in Cenpower Generation Company Limited (Cenpower), which is implementing the Kpone IPP project – a 340 megawatt combined cycle gas turbine power plant in Tema, Ghana.

AFC is the lead investor in the Main One fibre optic cable project, enhancing West Africa’s connection to Europe and the rest of the world through faster and more technologically advanced broadband capacity. AFC provided a USD50 million convertible debt investment in ARM Cement Limited (ARM), the second largest cement operator in Kenya to support expansion initiatives across Eastern and Southern Africa including; development and construction of a lime plant in Tanzania and expansion of ARM’s cement capacity in Kenya.

The transaction marked AFC’s first bilateral investment in Kenya.  AFC provided financing for Ethiopian airlines fleet expansion in the acquisition of Africa’s first Boeing 777 airline.  AFC also invested in the Bakwena toll road project in South Africa, and in the EURO 270 million Konan Bedie Toll Bridge in Côte d’Ivoire; the signature  Transport PPP project in Francophone Africa, underscoring its interest in investing in PPPs/PFIs in its focal sectors across the African continent.

AFC launched a landmark USD15 million project development facility with the Dutch Development Bank FMO in January 2013, to fund early-stage equity investments in projects under development pre-financial close, in the infrastructure sector across sub-Saharan Africa.

“As a way of showing appreciation for the massive support from our Original Equipment Manufacturers, OEMs and our customer loyalty, we have a culture of giving out gifts at the end of the year. This is  the fifth year of this annual bonanza tagged ‘Slot Promo 5’.

“We have fantastic gifts which include N500, 000 cash prize, a motorbike, double door refrigerators, LED TVS, several models of phones and the grand prize of a brand new saloon car.”