Africa Finance Corporation (AFC), one of the leading development finance institutions in Africa, on Thursday announced that it successfully secured a loan facility from the Export-Import Bank of China (CEXIM) of a US$200m 5-year loan and a US$100m 5-year stand-by facility for general corporate purpose.
The facility from CEXIM is the first to be secured by the continental financial institution from the People’s Republic of China (PRC).
According to a news report distributed by African Press Organisation (APO) Group on the loan facility, its acquisition follows the Corporation’s strategic focus to build a broad coalition of investors by diversifying its fund-raising activities to include all sources of institutional capital in East Asia, in addition to its existing partners in Europe & North America.
Apart from the medium-term liquidity that this proposed facility will provide, it will also further provide contingent funding support which is particularly important for liquidity risk management as well as opening up other financing and relationships with Chinese entities (both state-owned and private).
The news report indicated further that it had been agreed that the signing of the facility agreement shall signal the first step into what will be a long and beneficial relationship with CEXIM, including AFC’s support to CEXIM’s Africa strategy, looking at their portfolio of assets and advising them on how to optimise its loan book on the continent.
Commenting on the deal, AFC President, Samaila Zubairu, said: “In the last two decades, China has grown from a relatively small investor, to becoming one of Africa’s largest trading partners today.
“This facility is therefore not only a milestone for the Corporation and its strategy for the Far East, but also marks a natural evolution in the growing financial sophistication of China in Africa, a necessary development required to accelerate Africa’s journey towards closing the infrastructure deficit.
“Moreover, AFC welcomes CEXIM’s commitment towards its Africa strategy, and we look forward to lending our expertise on how best to deliver sustainable infrastructure investment that should catalyse industrial growth on the continent”, Zubairu projected.