By Dipo Olowookere
A loan facility worth $300 million has been secured by the Africa Finance Corporation (AFC) from the Export-Import Bank of China (CEXIM).
The facility from CEXIM marks AFC’s inaugural financing facility from the People’s Republic of China (PRC), following the corporation’s strategic focus to build a broad coalition of investors by diversifying its fundraising activities to include all sources of institutional capital in East Asia, in addition to its existing partners in Europe & North America.
According to a statement from the leading infrastructure development finance institution in Africa, the loan facility comprises $200 million 5-year loan and a $100m 5-year stand-by facility for general corporate purpose.
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).
It has also been agreed that the signing of the facility agreement shall mark 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.
President and CEO at AFC, Samaila Zubairu, disclosed that, “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.”
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