African Development Bank Group becomes a shareholder in Africa Finance Corporation

AFRICA – The Africa Finance Corporation has secured US$50m from the the African Development Bank- a triple A rated financial institution.

The two institutions: AfDB and AFC made the joint announcement at the 2019 Africa Investment Forum in Johannesburg, South Africa.

The AFC is a supranational institution established 13years ago by a treaty between member states.

The institutions initial equity funds were sourced from the Central Bank of Nigeria and some commercial banks including First Bank and Access Bank.

Before the AfDB joined, the corporation had 22 states and one multilateral organisation (the African Reinsurance Corporation) as members.

AfDB’s equity participation will give it a board membership position at the AFC and will also raise AFC’s total paid-up capital to US$1.75bn.

AFC’s Executive Director, Financial Services, Sanjeev Gupta, who was present at the announcement ceremony said the equity participation of AfDB which has Triple-A rating gives additional credibility to the corporation.

“This signifies a more lasting relationship,” Gupta said, adding that the corporation has had a robust relationship with AfDB since it was founded 13 years ago.

He disclosed that the corporation had executed US$6.6 billion transactions in 30 countries within the short period that it has been in operation.

AfDB’s Vice-President, Private Sector, Infrastructure and Industrialisation, Pierre Guislain Guislain, on the other hand, lauded the relationship between AFC and AfDB, adding that the equity investment in AFC would consolidate the bond.

AFC has also received funds from KfW Development Bank of Germany which gave it a U$150m 15-year loan facility.

Others source of funds include a US$150m Sukuk funding issued in 2017; $500m seven-year Eurobond issued in 2017; US$300m facility secured from Export-Import Bank of China in 2018 and US$650m seven-year Eurobond issued in 2019.

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