African economic resilience facility - Application

In response to economic challenges created by the global pandemic and the Russia-Ukraine conflict, Africa Finance Corporation (AFC) launched a US$2billion facility to support recovery and resilience in Africa.
AFC committed to funding up to 50% of the new African Economic Resilience Facility and mobilising the remainder through the Corporation’s network of international partners and investors.
The facility is disbursed through loans from AFC to commercial banks, regional development banks and central banks in various African countries, providing them with much needed hard currency liquidity to finance trade and other economic activities in their jurisdictions. These institutions are able to leverage AFC’s proven access to global funding to receive financing at competitive rates.

Background and context

  • Trade finance is an important instrument for influencing Africa's long-term economic development and structural transformation.
  • Africa’s trade finance gap is estimated by the African Development Bank to have averaged about $91bn over the last decade.
  • Among the main obstacles limiting the growth of Trade and Trade Finance in Africa are the following:

    • Limited foreign exchange liquidity – international trade is majorly priced in USD
    • Response of banks as leveraged institutions to heightened risks
    • Regulatory capital requirements (B3C), which have become tighter in recent years
    • Absence of sufficient and affordable risk mitigation solutions
    • Negative perception of African risk by international creditors. This leads to significant capital flight risks
  • COVID-19 had a negative impact on African economies in that it led to tightening of global financial conditions which triggered massive capital outflows from Africa, exceeding $5 billion in the first quarter of 2020.
  • Before the continent could recover, the Russia-Ukraine crisis has negatively impacted food security on the continent and led to challenges of inflation. The conflict further highlights the need to promote Africa’s self sufficiency by growing intra-African trade

AFC’s value addition

Group money

Lack of FX

  • USB Balance sheet
  • Major currencies supported
  • Leverage international network of partners
  • USB Balance sheet
  • Major currencies supported
  • Leverage international network of partners
Group earth

Deleveraging by global banks

  • Pan-African mandate - commitment to Africa
  • Flexible structuring solutions informed by unique challenges
  • Pan-African mandate - commitment to Africa
  • Flexible structuring solutions informed by unique challenges
Stars

Regulatory restrictions

  • Investment grade rating
  • Credit wraps
  • Risk substitution
  • Investment grade rating
  • Credit wraps
  • Risk substitution
Arror tr

Lack of risk mitigation solutions

  • Investment grade rating (A3 by Moody’s)
  • Payment risk cover
  • Investment grade rating (A3 by Moody’s)
  • Payment risk cover
In line with its mandate of promoting economic development in Africa, AFC wants to play its part in reducing Africa’s trade finance gap. This will be achieved through provision of liquidity to finance Africa’s international trade, as well as raising Africa’s trading capacity with the world through the provision of payment risk cover solutions.

Description of the facility

  • US$2billion facility to support economic recovery and continued economic resilience in Africa
  • 50% committed by AFC and balance to be mobilized through global network of funding partners
  • Disbursed as FI loans from AFC to commercial banks, regional development banks and central banks
  • Provides hard currency liquidity to finance vital trade and other economic activities in their countries.

In a nutshell

  • Short-term FI loans (up to 1 year)
  • Medium term FI loans (up to 10 years)
  • Limit - determined on a case-by-case basis
  • Bilateral/syndicated basis
  • Pricing – risk-based
  • Use of proceeds – on-leading for trade finance, general corporate purposes

Eligibility criteria

  • African domiciliation
  • Commercial banks, Development banks & Central banks
  • Financially sound and profitable
  • Demonstrable economic impact
  • Strong ESG track record

How to apply

Apply now by completing the application form here.

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Application Form

Eligibility

Primary country of domicile *
Market position by Assets *
Shareholders’ Funds in USD *
Type of financial institution *
Other
No. of years in existence *
Listed on a public exchange? *
Does the bank have an international credit rating? *
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Description of bank

Name of Bank? *
Description of Bank *
Description of Bank’s business model *
Description of Ownership of Bank *
Description of Management of the Bank *
Credit rating Agency *
Other
Long Term Foreign Currency Rating
Key Contact *
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Financing requirement

Amount of financing required *
Currency of financing required *
Currency of bank’s operations and reporting *
Tenor (years) for which financing is required *
Description of purpose for which financing is required *
Description of financing repayment mechanism *
Other
Description of collateral structure for the financing *
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Key disclosures

No. of regulatory penalties in the last 5 years?
No. of restructurings of the bank’s debt in the last 5 years?
No. of global Compliance (Sanctions / AML / CFT / ABC / etc) breaches and penalties in the last 5 years?
Name of current external auditor
Applicable accounting rules
Level of (regulatory) non-performing loans
Level of provisioning
Level of IFRS 9 Stage 3 loans
Level of COVID-19-related problem loans
Audited Financial Statements (Annual Report) for the last 4 years (16MB max per file)
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terms & conditions
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