AFC raises $400m in shariah-compliant commodity Murabaha facility

Africa Finance Corporation (AFC), the continent’s leading infrastructure solutions provider, has successfully closed a $400 million Shariah-compliant Commodity Murabaha facility, marking its strategic return to the Islamic finance market for the first time in eight years.

This milestone reflects AFC’s commitment to diversifying funding sources while expanding access to ethical and sustainable financing to meet Africa’s infrastructure needs.

Initially launched at $300 million, the facility was upsized to $400 million as strong investor demand resulted in a 47 percent oversubscription.

Emirates NBD Capital Limited, First Abu Dhabi Bank PJSC, and SMBC Bank International Plc acted as Joint Lead Arrangers and Bookrunners for the transaction, reinforcing AFC’s strong relationships with leading global financial institutions.

The transaction attracted participation from eleven leading Islamic financial institutions, including new AFC partnerships with Abu Dhabi Islamic Bank PJSC, Al Rajhi Bank, and Emirates Islamic Bank.

“This transaction reaffirms AFC’s role as a bridge between global capital and Africa’s most urgent infrastructure needs,” said Samaila Zubairu, President and CEO of AFC.

“The overwhelming demand demonstrates strong confidence in our investment strategy and Africa’s increasing importance in the Islamic finance landscape. By expanding our international funding sources, we continue to create innovative financial solutions to drive impactful and sustainable development across the continent,” Zubairu said.

The transaction builds on AFC’s proven track record in Islamic finance, including its groundbreaking $230 million Sukuk—the first-ever by an African supranational entity—issued in 2017.

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AFC has consistently broadened its funding portfolio with innovative transactions that open new capital markets to attract global investors to African infrastructure. In January, AFC raised $500 million from its first perpetual hybrid bond. In the same month, AFC received the highest possible credit ratings from S&P Global (China) Ratings and China Chengxin International Credit Rating Co. Ltd (CCXI) ahead of a potential panda bond issue.

This financing facility was structured in accordance with standards set by the Accounting and Auditing Organization for Islamic Financial Institutions, or AAOIFI, ensuring full compliance with global Islamic finance principles.

Islamic finance, including Murabaha structures, is widely regarded as ethical and sustainable due to its emphasis on asset-backed financing, risk-sharing, and the prohibition of speculative practices. These principles align with AFC’s mission to foster responsible investment that promotes long-term infrastructure development and economic stability in Africa.

“Islamic finance plays a growing role in our funding strategy, helping us tap into a diverse pool of investors who share AFC’s commitment to sustainable and responsible investing,” said Banji Fehintola, Executive Board Member and Head of Financial Services at AFC.

“The success of this Murabaha facility highlights the strong appetite for African infrastructure investments and underscores AFC’s ability to structure transactions that meet global investor expectations.”

Proceeds from the 3-year Murabaha financing will support AFC’s mission to accelerate industrialization, infrastructure development, and economic growth across the continent. A number of AFC’s transformative infrastructure projects are based in the Middle East and North Africa region, including Xlinks in Morocco, a pioneering project designed to supply sustainable electricity from the Sahara to the UK. Through the acquisition of Lekela Power, AFC, with its partner, Cairo-based Infinity Power, is Africa’s largest investor in clean energy, targeting 3GW of renewable capacity by 2026.