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AFC secures US$ 60 million debt facility from DEG and FMO

Enhances on-lending ability to further drive the pace of infrastructure development in Africa
The Africa Finance Corporation (“AFC” or “the Corporation”) has secured a US$ 60 million (Sixty Million United States Dollars) facility provided jointly by the German development finance institution DEG – Deutsche Investitions-und Entwicklungsgesellschaft mbH) and FMO, the Netherlands Development Finance Company. The DEG-led long-term facility consists of two sub-facilities of US$30 million from each institution. The facility comes together with a technical assistance programme from DEG to AFC, to enhance the Corporation’s environmental and social risk management processes.

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.

AFC is continuing to expand its funding to increase investments across a broad range of opportunities on the continent, while deepening its relationships with key DFIs. The Corporation is increasingly positioned as a partner of choice for international DFIs seeking to support the growth of infrastructure and heavy industry across the African continent, providing a strong endorsement of AFC’s business model and track record of delivery.

Commenting on the lending facility, Andrew Alli President & Chief Executive Officer (CEO), AFC said “The AFC is pleased to announce that following completion of a rigorous due diligence process by a joint team from DEG and FMO, this facility will be utilized for on-lending to infrastructure projects in Africa. Apart from the liquidity that this transaction provides, the line of credit is of strategic importance to AFC, as it comes with a technical assistance programme to support our environmental and social risk management system; a key pillar in helping to deal with risks often found in our core sectors. The facility also deepens our relationship with two key strategic partners."

Bruno Wenn, Chairman of DEG's Management Board also commented “Our commitment enables AFC to further finance the expansion of infrastructure across West Africa that is needed for private sector development. We are pleased that DEG is able to provide this important financing together with our cooperation partner FMO, thereby forging a strategic partnership aimed at Africa’s economic development.”

In addition, Jurgen Rigterink, Chief Investment Officer of FMO commented “This facility reinforces FMO’s mandate, which is to provide long term capital for projects in developing markets as well maximizing the development impact of such investments. Our methodology is designed to make sure that FMO's has a good financial return on investment as well as positive environmental and social effects.”

About AFC -

AFC is an African-led international financial institution, established in 2007 whose mission is 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 US$2.0 billion with shareholders’ funds of US$1.2436 billion and a 2013 funding programme of US$700 million. To complement its shareholders funds and enhance its financing capacity, AFC has completed several other bilateral borrowings from other DFIs and international commercial banks including a landmark US$200 million funding facility from the African Development Bank.. To execute its mandate, AFC has established partnerships regionally, with other institutions such as the African Development Bank, African Export-Import Bank, PTA Bank, Islamic Development Bank, Banque Quest Africaine de Developpement, the Nigerian Sovereign Investment Authority (NSIA); and Internationally with the China Africa Fund, the Infrastructure Development Finance Company of India (IDFC), FMO and the US Government through USAID in the US Presidential “Power Africa Initiative”.

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 investor in the Kainji power generation plant in the current Nigerian Government power sector privatisation round. Additionally in Nigeria, AFC made investments to support marginal field operators in the up and mid-stream oil and gas sector companies such as Neconde, FHN and Seven Energy. 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 also 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.

About DEG

Deutsche Investitions- und Entwicklungsgesellschaft (DEG) is one of Europe's largest development finance institutions. DEG is a subsidiary of the German government-owned KfW Bankengruppe. DEG finances investments of private companies in developing and emerging economies with a mandate to promote private business structures to contribute to sustainable economic growth and improved living conditions in those countries.

About FMO

FMO (the Netherlands Development Finance Company) is the Dutch development bank. FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. FMO believes a strong private sector leads to economic and social development, empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With an investment portfolio of EUR 6.3 billion, FMO is one of the largest European bilateral private sector development banks.