Africa Finance Corporation launches $2bn facility to support economic recovery, resilience in Africa

The Africa Finance Corporation (AFC) has launched a US$2billion facility to support recovery and resilience in Africa in response to economic challenges created by the COVID-19 global pandemic and the Russia-Ukraine conflict.

Already, the AFC has committed to funding up to 50 per cent of the new African Economic Resilience Facility and mobilising the remainder through the Corporation’s network of international partners and investors.

The facility was announced Thursday in Abuja at the AFC Live Infrastructure Solutions Summit.

According to the Corporation, the facility will be disbursed through loans from AFC to selected 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 will be able to leverage AFC’s proven access to global funding to receive financing at competitive rates.

Speaking on the rationale behind the launch, Head of Treasury and Financial Institutions, Banji Fehintola, said: “The COVID-19 pandemic set back Africa’s economic growth trajectory and widened the trade financing gap, while the Russia-Ukraine conflict has added a further set of challenges negatively impacting growth prospects across the continent.

“We are determined to play a leading role in helping the continent’s recovery and resilience, not only through the work we do in bridging Africa’s infrastructure gap but also through targeted interventions such as this $2 billion economic resilience facility.”

Applications for the African Economic Resilience Facility will open this month through AFC’s website (www.africafc.org), and through this funding intervention, AFC will accelerate its developmental impact in Africa, helping to drive the continent to a new phase of growth that is focused on maximum resource value capture and domestic job creation.

Over the last 15 years, AFC has built experience mobilising global capital for critical infrastructure projects in Africa.

The Corporation’s recent bond issues include a $750 million 7-year Eurobond issued in 2021 at AFC’s lowest yield to date.

The Corporation also established an independent asset management arm, AFC Capital Partners, with plans to raise US$2 billion to fund climate adaptation infrastructure projects in Africa.

To date, AFC which was established in 2007 to be the catalyst for private sector-led infrastructure investment across Africa has invested US$10 billion in projects across 35 African countries.

It is the second-highest investment grade rated multilateral financial institution in Africa, and AFC’s approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and risk capital to address Africa’s infrastructure development needs and drive sustainable economic growth.

AFC invests in high-quality infrastructure assets that provide essential services in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications.

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