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AFC’s First Investment in Chad

The Africa Finance Corporation (AFC) is a Mandated Lead Arranger of a US$1.305 billion pre-payment facility for Glencore Energy UK. The facility will be used by Glencore to provide financing of up to US$1.450 billion to Société des Hydrocarbures du Tchad (“SHT”), the National Oil Company of Chad. The pre-payment facility will, in turn, be used by SHT to acquire Chevron Global Energy Inc’s. (Chevron’s), 25% participating interest in the Doba consortium, which owns and operates oil producing assets in Chad. AFC was one of the six Mandated Lead Arrangers of the pre-payment facility, the others being Credit Agricole Corporate and Investment Banking, Deutsche Bank, FBN Bank (UK) Ltd, Natixis, and Société Generale Bank, with Citibank N.A. as the Account Bank. AFC’s contribution to the financing was USD100 million.

The Doba Consortium owns and operates the Doba Consortium petroleum assets in Chad, together with the pipeline companies responsible for transporting crude oil to Cameroon for export. The Consortium comprises ExxonMobil Corporation (ExxonMobil), Chevron Global Energy Inc. (Chevron), and Petroliam Nasional Berhad (Petronas). The field is operated by ExxonMobil.

The Natural Resources sector is a core investment priority for AFC. The Corporation is playing an active role in supporting the acquisition of assets by indigenous entities. This forms part of the Corporation’s wider objective to support the enhancement of local content, and local ownership, in the natural resources sector across the continent. This investment marks the first project for the AFC in Chad, which joined the Corporation as a member country in October 2012.

AFC, a multilateral finance institution, was established in 2007 with an initial capital base of USD1 billion, to be a catalyst for private sector infrastructure investment across Africa. AFC was established to help fill a critical void in providing project structuring expertise and risk capital to address Africa’s infrastructure development needs, and is increasingly being seen as the benchmark institution for private sector-led investment in the core infrastructure sectors of power, natural resources, heavy industry, transport and telecommunications.

Commenting on the investment Andrew Alli, President & Chief Executive Officer, AFC said “We are particularly pleased to be able to finance our first project in Chad, a member country of the AFC since 2012. This investment represents a continuation of our strategy to support the indigenization of Africa’s oil and gas sector through the provision of finance for the acquisition, or development of assets by local entities. By providing finance for Glencore’s pre-payment facility, AFC is ultimately supporting the industrial and economic development of the Republic of Chad’.

About the AFC:

• AFC is an African-led multilateral development financial institution, established in 2007, with a mission to improve African economies by proactively developing and financing infrastructure, industrial and financial assets.

• AFC is involved as an investor, developer and financier of various infrastructure projects, and is gaining recognition as the benchmark institution for financing the development of infrastructure projects in Africa.

• AFC’s current authorized share capital is USD2.0 billion with shareholders’ funds of USD1.28 billion and a 2014 funding programme of USD900 million.

• AFC is one of the highest investment grade-rated multilateral finance institutions on the African continent, with an A3 (long term)/P2 (short term) foreign currency debt rating issued by Moody’s Investors Service.

AFC’s projects:

• AFC was the main African participant in a seven- year USD 750 million syndicated reserve base lending facility to develop the landmark Ghanaian Jubilee Oil Field – West Africa’s largest offshore deepwater find in over a decade.

• AFC, as the mandated lead arranger, made a landmark investment in a syndicated facility of USD 470 million for Neconde Energy Limited. The facility enabled Neconde, an indigenous Nigerian Oil & Gas company, to acquire Shell International’s oil producing assets in the Western Niger Delta.

• AFC is the lead investor in the award winning Cabeolica project, a USD90 million, 26MW landmark renewable energy wind power project in Cape Verde.

• AFC is the Technical Adviser to the Central Bank of Nigeria (CBN) on the CBN’s USD2.0 billion Power and Aviation Intervention Fund (PAIF).

• AFC is a partner with Vigeo Holdings Limited and Tata Power Delhi Distribution Limited for the acquisition of power distribution assets and a lead financier in the acquisitions of the Kainji and Ughelli power generation plants in the current Nigerian Government power sector privatisation round.

• AFC is also the lead investor in Cenpower Generation Company Limited (Cenpower), which is implementing the Kpone IPP project – a 340 megawatt combined cycle gas turbine power plant in Tema, Ghana.

• AFC is the lead investor in the Main One fibre optic cable project, enhancing West Africa’s connection to Europe and the rest of the world through faster and more technologically advanced broadband capacity.

• AFC provided a USD50 million convertible debt investment in ARM Cement Limited (ARM), the second largest cement operator in Kenya to support expansion initiatives across Eastern and Southern Africa including; development and construction of a lime plant in Tanzania and expansion of ARM’s cement capacity in Kenya. The transaction marked AFC’s first bilateral investment in Kenya.

• AFC provided financing for Ethiopian airlines fleet expansion in the acquisition of Africa’s first Boeing 777 airline.

• AFC has invested in the Bakwena toll road project in South Africa, and in the EURO 270 million Konan Bedie Toll Bridge in Côte d’Ivoire; the signature Transport PPP project in Francophone Africa, underscoring its interest in investing in PPPs/PFIs in its focal sectors across the African continent.

• AFC launched a landmark USD15 million project development facility with the Dutch Development Bank FMO in January 2013, to fund early-stage equity investments in projects under development pre-financial close, in the infrastructure sector across sub-Saharan Africa.

• The AFC has established partnerships with national, regional and international organizations and with sponsors active in the infrastructure space in Africa.