• Thursday, December 07, 2023
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AFC grows assets by 16% in 2021 on rising impact investing

AFC grows assets by 16% in 2021 on rising impact investing

Africa Finance Corporation (AFC), Africa’s leading infrastructure solutions provider, reported 16 percent growth in total assets driven by high impact investments and its strong credit profile.

The total assets of the Corporation, which celebrated its 15 year anniversary in Lagos recently rose by 16.3 percent to a record $8.56 billion.

Despite the pandemic and commodity-driven headwinds impacting AFC’s operating environment, the Corporation saw its annual profits increase by 26.6 percent to $209.7 million in 2021, passing the $200 million mark for the first time in its 15-year history, from $165.5 million in 2020.

The dramatic increase can partly be attributed to investments in high impact assets in targeted sectors across Africa. The Corporation leveraged on its investment-grade credit rating and reputation to mobilise finance from international markets to help reduce Africa’s infrastructure deficit.

“This has been a year of solid progress in our core objectives of building value to Africa’s economies through instrumental infrastructure driving growth and job creation,” said Samaila Zubairu, President and CEO of AFC.

AFC’s reach on the continent is now larger than it has ever been, with investments expanding to 35 countries and cumulative disbursements rising by 14percent to $9.9 billion (2020: $8.7 billion). AFC increased Member States by five to 33, with the accession of Burkina Faso, Democratic Republic of Congo, Egypt, Morocco and Niger.

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Among projects during 2021, AFC invested $150 million for the development of cashew and cotton integrated industrial parks in Benin and Togo; provided a $200 million corporate facility to BUA Industries Limited for the construction of a sugar refinery and ethanol plant in Nigeria; and invested $175 million in the Baomahun Gold Project in Sierra Leone.

AFC Capital Partners (ACP) opened as an independent asset management business and launched its first product, the Infrastructure Climate Resilient Fund, with a target to raise $500 million in 12 months and $2 billion over the next three years for investment in robust energy, transport, buildings and other infrastructure.

The past year also saw AFC successfully launch two new products through the Syndications unit – the A/B Bond and Credit Insured B Loans – both of which will significantly deepen capacity to channel capital from global investment markets into the African continent.

The Corporation continued to diversify funding, with a 21.5 percent boost to borrowing year-on-year at $6.19 billion (2020: $5.09 billion). AFC successfully accessed the global debt markets by issuing $1.8 billion in new loans and bonds during the year.

This included: $250 million tier-2 capital loan from the U.S. International Development Finance Corporation, $750 million Reg S / 144A seven-year Eurobond (the Notes due 2028 were priced at 175 bps over US Treasuries to yield 2.991 percent, and were 3.5 times oversubscribed), €100 million Euro-denominated ten-year loan facility by KfW – Ipex, a subsidiary of the KfW Group, US$170 million 12-year syndicated multilateral loan facility led by Deutsche Investitions- und Entwicklungsgesellschaft (DEG), $100 million ten-year loan facility from the Export-Import Bank of India, and $400 million three-year club loan (2.5 times oversubscribed), $194 million equivalent in five privately placed medium-term notes under the $5 billion Global Medium-Term Note programme.

“With this growth in trade, our demographic trends and rapid industrialisation, we are seeing exponential growth in opportunity for diversification and beneficiation across an array of countries and sectors,” said Zubairu.