The Africa Finance Corporation (AFC) has secured a $200 million facility from The African Development Bank (AfDB), the AFC announces, to be used for infrastructure development.
The ADB agreed to provide the $200 million credit facility for a ten year term; with the signing ceremony taking place in Lagos on Saturday.
It is hoped that by taking on the long-term funding, the AFC will be able to contribute towards the development of various infrastructure projects over the coming years, with projects primarily to span the natural resources, power, telecoms and transport industries.
The AFC explained its role in the development of the African economy, saying: “AFC is involved as an investor, developer and financier of various infrastructure projects. Currently in its fifth year of operation, AFC is playing a major role in bridging the continent’s critical infrastructure investment gap.”
Speaking at the signing ceremony at the weekend, Dr. Ousmane Dore, the AfDB’s resident representative to Nigeria underlined the ADB’s commitment to the important project of improving infrastructure for the sake of bettering industries across Africa. He said: “The scale and magnitude of the infrastructure deficit African economies face can only be effectively addressed when institutions coalesce in partnership, to finance indigenous long term investment.”
The AFC also hopes that by taking on a new source of long-term funding it can better its balance sheet and provide improved financing to its clients on the African continent. President and Chief Executive Officer of the AFC Mr Andrew Hill told attendees at the signing: “Financial institutions need to leverage their balance sheets in order to have access to the necessary liquidity to fund the assets they create. This facility … represents a key part of AFC’s international funding strategy.”
Highlighting the importance of African collaboration and the potential of African partnerships to assist development, he added: “We are delighted that this long term borrowing is from another African institution with which AFC collaborates closely and is developing a strategic partnership. The transaction demonstrates the increasing financial capacity of the continent to drive economic development and help transform Africa.”