AFC, IFC seal $354m infrastructure, connectivity facility for Africa

Africa Finance Corporation (AFC), the continent’s foremost provider of infrastructure solutions, has announced the successful completion of a $160 million Kimchi Term Loan with Mizuho Bank and Shinhan Bank.

The former acted as book-runners while the latter were the mandate lead arrangers. According to a statement released by the continental development finance institution, the successful closure of this facility was sequel to the inaugural $140 million Kimchi loan facility in 2019, which signalled AFC’s foray into the Korean debt market.

Banji Fehintola, AFC’s senior director and treasurer, said the facility put a validation on AFC’s strong market access in the Korean markets.

He said: “We are pleased to have successfully executed on our second Kimchi loan facility, expanding our footprint in Korea and Asian capital markets at large. Today’s announcement serves as a validation of AFC’s strong market access, the strength of our credit profile and our well-established investor engagement programme.

“We continue to seek strong partnerships with credible institutions across the globe to provide capital for the urgently needed infrastructure required to sustainably transform African economies and change the lives of its people for good.”

“Other participating financial institutions on the new Kimchi facility include Taipei Fubon Commercial Bank Ltd, Hua Nan Commercial Bank Ltd, Taiwan Cooperative Bank, The Export-Import Bank of the Republic of China, Industrial Bank of Korea and Kexim Bank Limited,” AFC stated.

In another development, the International Finance Institution(IFC) has provided loans to Airtel Africa’s subsidiaries worth $194 million, meant to connect millions of new subscribers to internet in six African countries which are the Democratic Republic of Congo(DRC), Kenya, Madagascar, Niger, Republic of Congo, and Zambia.

“IFC will provide six of Airtel Africa’s subsidiaries with a mix of local currency and USD loans totaling $194 million. The new financing facility is in line with Airtel’s Africa strategy to increase debt within its operating companies,” IFC said in a statement.

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IFC added that the financing facility has a tenor of eight years to be deployed in the aforementioned countries where the banking landscape and access to local funding remains largely underdeveloped.

“IFC’s loan is supported by co-financing from institutional investors through IFC’s Managed Co-Lending Portfolio Program (MCPP). IFC’s loan in Zambia is supported by the Local Currency Facility of the International Development Association’s (IDA) Private Sector Window,” IFC added.

Segun Ogunsanya, Airtel Africa’s CEO, expressed his satisfaction with the closure of the facility.

He said: “I am very excited to announce the signing of this new facility with IFC. Not only does this facility align with our focus on improving our balance sheet through localising debt within our operating companies, but it also supports our commitment and our ability to meet very strict ESG criteria in demonstration of the continued execution of our sustainability journey.”

“I look forward to working closely with IFC in the coming years and to exploring further opportunities to cooperate together to support the economies and communities where we operate.”

IFC is a member of the World Bank Group with presence in over 100 countries utilising its capital, expertise and influence to create markets and opportunities in developing countries.