Africa Finance Corporation (AFC) has announced its acceptance of a US$150 million 15 year loan facility from KfW [Development Bank] (KfW). The loan agreement was signed today in London by Andrew Alli, CEO of AFC, and Jan Martin Witte, Head of Division for Infrastructure, of KfW.
The funds will be used to refinance projects across the corporation’s current and prospective member states in several of AFC’s priority investment sectors: power, telecommunications, transport and heavy industries.
KfW conducted a positive due diligence exercise and credit appraisal prior to offering the loan facility to AFC. The team’s positive response was based on AFC’s successful track record of project financing and development throughout its relatively short history.
Andrew Alli, President and Chief Executive Officer of AFC, commented on the announcement: “Not only will this loan facility from KfW add valuable capital to our finance reserves but the 15-year tenor period is particularly suited to funding the long-term, large-scale infrastructure projects that are so needed across Africa.
“Africa’s infrastructure deficit is widely estimated to be approximately US$90b every year for the next decade, with spending needed for new investments as well as operations and maintenance of what is already there. Loans such as these are invaluable if we are to make substantial progress with bridging this gap and stimulating economic development on the continent.”
Jan Martin Witte, Head of Division for Infrastructure at KfW Development Bank, stated: “KfW is excited about Africa’s growth potential. To enable that growth, and to build a sustainable future, countries on the continent will have to invest heavily in power, transport and other infrastructure sectors. As one of the world’s leading development finance institutions, KfW is proud to build partnerships with entrepreneurial institutions such as AFC that can drive development and progress on the African continent.”
Earlier today AFC, along with partners Harith General Partners, announced a joint venture to merge several key power assets. These include the AFC’s interests in Cenpower, owner of the Kpone Independent Power Project under construction in Ghana, and Cabeolica, a wind farm that provides 20% of Cape Verde’s energy needs. The joint venture’s near term portfolio supplies reliable energy to over 30 million people in at least 10 African countries and has a combined gross operational and under-construction capacity of 1,575 MW.
The announcement comes shortly after AFC was awarded an A3/P-2, investment grade credit rating with a stable outlook by international ratings agency Moody’s for a third consecutive year.