AFC Raises US$400 Million for African Infrastructure
Funding | Feb 07, 2025 | Zawya
Africa Finance Corporation (AFC) has successfully closed a US$400 million Shariah-compliant Commodity Murabaha facility to finance infrastructure projects across Africa. This move marks AFC's re-entry into the Islamic finance market after eight years, underscoring its strategy to diversify funding sources and align with ethical and sustainable financing principles. Initially launched at US$300 million, strong investor demand led to a 47% oversubscription, evidencing trust in AFC's mission and Africa's role in global Islamic finance. As part of the financing strategy, AFC worked with major Islamic financial institutions and international banking partners to ensure compliance and open new capital markets for African development. The financing will support key infrastructure projects aimed at boosting industrialization and economic welfare across the continent, with a significant focus on renewable energy initiatives. AFC, established in 2007, has invested over US$15 billion in infrastructure across Africa.
Sectors
- Infrastructure Development
- Islamic Finance
- Renewable Energy
Geography
- Africa – AFC's infrastructure investments and activities primarily focus on African countries.
- Middle East and North Africa – The AFC has transformative infrastructure projects located in this region, and the article references partnerships with prominent financial institutions here.
Industry
- Infrastructure Development – The article centers on the Africa Finance Corporation's efforts to raise funds to support infrastructure projects across Africa.
- Islamic Finance – The financing facility is Shariah-compliant and leverages Islamic finance principles, highlighting AFC's engagement in this sector.
- Renewable Energy – AFC plans to invest in renewable energy projects, such as the acquisition of Lekela Power, enhancing Africa's capacity for clean energy.
Financials
- US$400 million – Total amount raised through the Shariah-compliant Commodity Murabaha facility.
- 47% – Oversubscription rate of the Murabaha facility.
- US$230 million – Amount raised in AFC's groundbreaking Sukuk in 2017.
- US$500 million – Funds raised by AFC through its first perpetual hybrid bond in January.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Africa Finance Corporation (AFC) | Initiator | Company | A multinational financial institution established to facilitate infrastructure projects across Africa. |
| Abu Dhabi Islamic Bank PJSC | Investor | Company | An Islamic financial institution that participated in the Murabaha facility. |
| Al Rajhi Bank | Investor | Company | One of the largest Islamic banks in the world, contributing to the Murabaha facility. |
| Emirates Islamic Bank | Investor | Company | A leading Islamic financial institution participating in the financing arrangement. |
| Emirates NBD Capital Limited | Joint Lead Arranger and Bookrunner | Company | Part of the Emirates NBD Bank, instrumental in arranging the transaction. |
| First Abu Dhabi Bank PJSC | Joint Lead Arranger and Bookrunner | Company | Collaborated in structuring the financing facility. |
| SMBC Bank International Plc | Joint Lead Arranger and Bookrunner | Company | Played a lead role in organizing the financing as part of a global consortium. |
| Yewande Thorpe | Communications Contact | Person | Communications professional at Africa Finance Corporation. |