The Africa Finance Corp. (AFC) raised $2 billion via a syndicated loan, with more than half provided by Asian and European banks seeking to capitalize on growing demand for infrastructure projects across the continent, including a proposed oil refinery to be built by billionaire Aliko Dangote in East Africa.
Each region accounted for about 35% of the creditors, according to a statement by AFC.
Leading banks in the transaction
| Bank | Region |
|---|---|
| Barclays Plc | Europe |
| Commerzbank AG | Europe |
| First Abu Dhabi Bank PJSC | UAE |
| FirstRand Ltd. | Africa |
| Export-Import Bank of India | Asia |
| Bank of Communications Co. | Asia |
| Industrial and Commercial Bank of China | Asia |
| Industrial Bank of Korea | Asia |
Source: AFC
African nations are pushing to build railroads, ports and refineries to take advantage of the demand for abundant resources on the continent. Returns from infrastructure projects in Africa can be as high as 20%, according to a report by the Organisation for Economic Co-operation and Development and the African Union.
That’s luring investors from Asia and Europe despite higher costs and shifting timelimes for building public work projects.
“We typically have a diverse funding base,” Chief Executive Officer Samaila Zubairu said in an interview. “But in this round we saw a lot more Asian banks. We have banks from China, Hong Kong, and Korea. They’re a lot more engaged.”
Dangote refinery investment
AFC has a pipeline of projects and is also in discussions to invest in a proposed oil refinery to be built by billionaire Aliko Dangote in East Africa, Zubairu said.
The deal would mark AFC’s participation in Dangote’s plan to replicate his Nigerian refining model in Kenya, which could add another 700,000 barrels per day to the conglomerate’s global processing capacity.
Credit rating
AFC has a long-term rating of A from S&P Global Ratings, with a positive outlook, positioning the lender to access international capital markets at competitive rates for its infrastructure investment pipeline.
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