AFC is an African-led investment grade rated multilateral development finance institution 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 infrastructure projects in Africa.
Through its unique hybrid structure of a multilateral institution with substantial private sector participation, the AFC acts as both a leading financier and adviser to its clients. It offers project, trade finance and structured debt, greenfield equity, and buy-out capital as well as fixed income products. It complements these products offerings with advisory capabilities in areas such as: project development, capital raising and restructuring.
Further details on our strategy in action can be read in our latest annual report and through the projects we have developed.
We originate and execute transactions in the power, transportation infrastructure, heavy industries, natural resources and telecommunications sectors. We typically assess projects of magnitude between [US$50 and US$200 million ] for equity and/or debt investment, but have advised on and led the project management of significantly larger deals.
See our Projects section for more detail.
A report by PricewaterhouseCoopers forecasts that infrastructure spending in Africa will grow from US$70 billion in 2014 to US$180 billion per annum by 2025. AFC’s funding and project development expertise have clearly never been more important or needed.
As an African-led international institution, the corporation combines the best of both worlds, adopting a pioneering approach to the funding and development of their projects. The projects developed by AFC have proven to have a lasting effect on the local economy but more than that, they also have the potential to act as a template for further developments in the sector; AFC intends to remain at the forefront of the sector going forward.
Africa suffers from an ‘infrastructure paradox’: Many projects, and availability of funding in the global finance system, but very few are bankable projects. To resolve this, AFC is committed to identifying innovations that will accelerate investment into infrastructure.
One such innovation has been the creation of Platform Vehicles, where multiple assets are put into one investment vehicle in order to generate scalable infrastructure investment.
AFC’s joint venture with Harith General Partners, now Anergi Holdings , is perhaps the best example of this. Here, over 1,575 MW of combined gross operational, and under-construction energy generation capacity, supplying power to over 30 million people across 10 countries, were merged.
By merging the key companies within our respective power asset portfolios, we have been able to create a dedicated company that is able to attract the high levels of investment necessary to plug Africa’s energy gap. This model is one we shall seek to replicate across the various sectors in which we operate in order to accelerate infrastructure investment levels.
Given the scale of the Africa infrastructure investment requirement, AFC works in partnership and collaboration with various developers, financiers and banks in the infrastructure space, including: long-standing Development Finance Institutions like African Development Bank, International Finance Corporation and Africa Export Import Bank, Regional and European Development Finance Institutions, Private Equity Funds, local and international commercial banks, international Export Credit Agencies, and global investment banks.
Among other criteria, AFC focuses on working with partners with strong operational capacity, a demonstrable commitment to African development, clear track record and history, and a compelling value add.
AFC is private sector majority owned and managed.
AFC is private sector majority owned and led. Our shareholders include various African financial institutions and other industrial and corporate shareholders. Each of these groups contributes significantly to the makeup and operations of the institution. The public-sector shareholding gives AFC important access to government, which is critical in Africa for sustainable investments in infrastructure. Having African financial institutions so actively involved promotes synergy between African banks, broadens our reach and strengthens local support and partnership. The African industrials and corporations on our board help integrate local corporate experience, and strengthen support from leading local sponsors.
AFC successfully secured financing facilities totalling over US$1.79 billion from Rand Merchant Bank, Deutsche Investitions-und EntwicklungsgesellschaftmbH, the Netherlands Development Finance Company, and the Society for the Promotion and Participation for Economic Cooperation European Financing Partners, Islamic Development Bank and KFW Development Bank.
We also debuted on the international syndicated loan market with an oversubscribed 2-year US$250 million term loan facility. In 2015, AFC concluded its debut US$750 million 4.375% 5-year international bond. The final order book was more than six times oversubscribed at over US$4.7 billion from a total of 315 investors. In keeping with demand to support AFC’s ambitions, the 2017 Sukuk for US$150 million was more the twice oversubscribed and the first Sukuk to be issued by an African supranational entity.
The borrowing program will continue in order to further support our growth plans.
The public-sector shareholding gives AFC important access to government, which is critical in Africa for sustainable investments in infrastructure. Having African financial institutions so actively involved promotes synergy between African banks, broadens our reach and strengthens local support and partnership. The African industrials and corporations on our board help integrate local corporate experience and strengthen support from leading local sponsors.
In 2014, AFC received its first international credit rating from Moody’s Investor Service, with an A3 (long term)/P2 (short term) foreign currency debt rating, making the Corporation the second highest investment grade rated multilateral financial institution on the African continent. This credit rating was reaffirmed in April 2015, in 2016 and in 2017
Our focus is on private sector-led investments by credible local and international sponsors in our focus sectors. We selectively work with government-owned enterprises and agencies, so long as such projects are structured on a bankable, private sector basis. Our projects may be greenfield developments, brownfield expansions, early stage capital, acquisitions, refinancing or working capital. We provide finance across the entire capital structure of a company or project, insofar as it lies within our focus sectors of – power (electricity), natural resources (oil, gas and mining), heavy industry (fertilizer, cement, material processing, fabrication), transportation (vessels and infrastructure), and telecommunications. We have investments in 33 countries across the African continent.
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 Ouest Africaine de Development, the Nigerian Sovereign Investment Authority and internationally with the China Africa Fund, the Infrastructure Development Finance Company of India, the Dutch development bank FMO and the US Government through USAID and the US Presidential “Power Africa Initiative”.
AFC faces risks similar to all infrastructure financiers globally, including sovereign and project specific risks. These risks are across a broad spectrum of areas but range from issues relating to sponsor quality, product off-take, commodity prices, feedstock supply, operations and maintenance, construction completion, reputational, environmental, health, safety, and regulatory stability.
In all its projects, AFC employs a robust risk management framework that aims to identify, quantify and mitigate or manage all risks associated with each project. The organisation operates in accordance with international standards of private equity and project finance, and all members of our teams from origination through execution and transaction monitoring are highly trained and equally focused on managing risks in the transactions that we work on.
AFC has an approved Environmental and Social Risk Management Policy to ensure that it carries out its lending, investment and advisory services to its clients and counter parties in a manner that is environmentally sound and ensures sustainable development.
Further detail on our policy and sustainability initiatives can be found in the Sustainability section.
AFC’s unique position as both a financier and project developer enables it to attract investment into the continent’s infrastructure from more markets around the world. The recent success of our Swiss Franc (CHF) Bond issue, and our maiden Sukuk, are perhaps amongst the best examples of this. As we turn to our next decade, our near-term strategy is to become a US$5 billion Corporation by 2020.
We will continue to finance and develop the continent’s much-needed infrastructure projects, focusing on those that will make the biggest contribution to driving economic and social development, and to job creation in the local communities. It is through investments such as these that we will create a brighter and more prosperous future for Africa.
AFC has sought to address the wider infrastructure divide by originating, structuring and executing projects in the African power sector….
The DFI community, including the AFC, continues to play the important facilitation role by becoming more and more involved in projects….
As a continent endowed in natural and mineral resources, Africa has the capacity for sustainable growth in industrial output….
Expanding connectivity and energy efficient equipment are predicted to be the main drivers of investment and deal activity in Sub Saharan Africa….
AFC acts as an adviser and financier to a number of leading sponsors seeking to undertake important transactions in the mining and oil and gas industries and associated infrastructure….