• Thursday, March 28, 2024
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AFC secures $250 million loan to bridge Africa’s infrastructure deficit

AFC secures $250 million loan to bridge Africa’s infrastructure deficit

Africa Finance Corporation (AFC) one of Africa’s leading infrastructure solution providers has secured a tier-2 capital loan worth $250 million loan from the United States International Development Finance Corporation (DFC) which will be used to strengthen the corporation’s investment capacity going forward.

Furthermore, the loan will also be used to provide competitive financing solutions for bridging Africa’s infrastructure deficit and also complement the corporation’s diversification of investor base, AFC said in a recently released press statement

With the funding coming at a time when cross country trade in the African continent has kicked off officially, experts are of the opinion that the loan facility will be used to enhance necessary infrastructure which will ensure a seamless and stress-free trade activities among African countries.

Samaila Zubairu, President, AFC said that the loan issued will help the corporation fulfil its objectives despite disruptions owing to the outbreak of the Coronavirus pandemic noting that it also signifies the aspiration of the United States in developing Africa.

The US Government seeks to play a greater role in Africa’s development by establishing a dedicated DFI as the AFC has partnered with the US on several infrastructure initiatives, this funding will also ensure the Corporation is able to continue fulfilling its objectives in the wake of the on-going COVID-19 pandemic, which has placed a greater responsibility on development finance institutions in helping to drive a sustainable recovery across Africa.” Samaila said.

Read also: Buhari Seeks more Chinese support for infrastructure

“DFC is proud to expand our relationship with a key infrastructure investor in Africa. This financing advances DFC’s strong commitment to Africa by supporting investment in the modern infrastructure that is essential to economic growth and expanded connectivity with the world” Adam Boehler, CEO of DFC said.

Jide Babatope, A Lagos based economic analyst told BusinessDay that the loan is timely as the lack of proper infrastructure especially road accessibility has damped the prospects of the agreement

“Basically, the $250 million loan is meant to support investment in modern infrastructure that is essential to growth and better trade relations. One of the challenges or rather setbacks of AfCFTA is the lack of sophisticated road infrastructure from road to rail to maritime which has fostered a form of scepticism regarding the success of the trade agreement

But with the funding and expectations that it will deployed to essential infrastructure improvement in the continent, there is hope for a better AFCFTA implementation and also improved trade relations among African countries since infrastructure is an integral aspect of cross-border trade.” Babatope said.

The Corporation which principally funds and develops projects in the power, transportation and logistics, heavy industries, natural resources and telecommunications sectors has its invested in 32 African countries and hopes to expand its footprints to other African countries.