October 12, 2018

AFC acquires $300m facility from EXIM Bank of China

AFC acquires $300m facility from EXIM Bank of China

Nigerian President Muhammadu Buhari (2nd R) and Chinese President Xi Jinping (4th L) attend their meeting at the Great Hall of the People in Beijing on April 12, 2016. Muhammadu Buhari is on a visit to China from April 11 to 15. / AFP PHOTO / POOL / KENZABURO FUKUHARA

By Yinka Kolawole

Africa Finance Corporation (AFC),  the leading infrastructure development finance institution in Africa, has announced its successful acquisition of a loan facility from the Export-Import Bank of China (CEXIM) of a $200m 5-year loan and a $100m 5-year stand-by facility for general corporate purpose.

The facility from CEXIM marks AFC’s inaugural financing facility from the People’s Republic of China (PRC). This follows the Corporation’s strategic focus to build a broad coalition of investors by diversifying its fundraising activities to include all sources of institutional capital in East Asia, in addition to its existing partners in Europe & North America.

A statement from AFC , yesterday said apart from the medium-term liquidity that this proposed facility will provide, it will 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).

“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.

Samaila Zubairu, President/CEO, AFC, commented: “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.