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Tag: AFC

  • AFC issues $150m maiden Sukuk

    AFC issues $150m maiden Sukuk

    Africa Finance Corporation (AFC), a leading pan-African multilateral development finance institution and project developer, has issued its maiden Sukuk, the highest-rated ever Sukuk issuance from an African institution.

    Following high levels of investor interest, the initial target of $100 million was more than twice oversubscribed, resulting in the transaction being upsized to $150 million and a final order book of approximately $230 million. In addition to being the first Sukuk transaction of 2017, it is also the first Sukuk to be issued by an African supranational entity.

    The Sukuk is AFC’s second foray into Islamic finance; the corporation accepted a-$50 million 15-year line of financing from the Islamic Development Bank (IDB) in 2015 to finance Islamic Finance-compliant projects located across the numerous African IDB member countries.

    The privately placed 100 per cent Murabaha Sukuk, which has been awarded an A3 senior unsecured rating by Moody’s Investors Service, has a three year tenor and will mature on 24 January 2020. Emirates NBD Capital, MUFG and RMB acted as Joint Bookrunners and Joint Lead Managers with Emirates NBD Capital also acting as the Sole Global Coordinator.

    Speaking on the development, President and CEO of AFC,Andrew Alli, said: “The core values of Islamic finance, the need to invest ethically in assets that have a tangible positive social impact, made a Sukuk issuance a natural choice for us. We offer global investors the chance to be involved in high-impact infrastructure projects that not only promote social and economic development across Africa but also generate economic returns for our investors.

    “This Sukuk represents a milestone in our financing activities, a milestone that will enable us to further diversify our funding sources, to build new relationships with key investors in international markets and help us diversify our portfolio of projects to continue delivering real impact across the continent.”

    Ahmed Al Qassim, CEO of Emirates NBD Capital, also said: “Emirates NBD Capital is delighted to have supported the inaugural $150 million three-year Sukuk issuance. The successful completion of the transaction is a testament to AFC’s standing with the international investor community and AFC’s commitment to develop new sources of funding.

    “As the Sole Global Coordinator for the Sukuk, Emirates NBD Capital continues to lead the development of international Sukuk as a product and providing our clients with unique solutions to meet their funding requirements.”

    AFC has a diverse funding base, with a range of funding from sources across different markets. Last year the corporation issued its debut Swiss Franc denominated long three-year bond, raising CHF 100 million, and accepted a $150 million 15 year loan facility from KfW Development Bank. In 2015 AFC’s inaugural 144A/Reg S, $750 million five-year international bond was more than six times oversubscribed at over $4.7 billion, attracting institutional investors from across Asia, Europe, Middle East and the United States.

  • AFC mulls dollar sukuk

    Apan-African multilateral institution based in Nigeria, Africa Finance Corporation (AFC), is likely to make a debut United States (U.S.) dollar sukuk issue by early February, banking sources  have said.

    If AFC makes a final decision to go ahead with the proposed debt sale in the coming days, the sukuk will be issued in two or three weeks through a private sale, a banking source familiar with the transaction said.

    At least one of the banks arranging the transaction is based in the United Arab Emirates (UAE), the source added.

    A spokeswoman at AFC declined to comment.

    A private placement normally requires less documentation than a bond listed on a public exchange.

    The sukuk would be structured with a murabaha format, a popular cost-plus structure in Islamic finance, and use Nasdaq Dubai’s platform for murabaha transactions, according to a report by Moody’s Investors Service, which assigned a provisional A3 credit rating to the Cayman-domiciled special purpose vehicle.

    “We will see more sukuk issuance from Africa-based issuers over the next few years” as borrowers seek to expand their investor bases, said Dr. Mohamed Damak, global head of Islamic finance at S&P Global Ratings.

    “Another reason for issuers in Africa to choose the sukuk route is that sometimes sukuk can be cheaper than (conventional) bonds in terms of cost of funding, especially when it attracts significant interest from the market.”

    AFC obtained a 15-year, $50 million line of financing from the Saudi Arabia-based Islamic Development Bank in 2015. It issued a debut $750 million conventional bond in 2015, a five-year deal that offered a 4.375 per cent coupon.

    Last year, it issued a 100 million Swiss franc bond. That paper, with a maturity of three years and 150 days, pays a 0.85 percent coupon and was arranged by Deutsche Bank and UBS.

  • Lagos, investors sign N844bn MoU on 4th Mainland Bridge

    Lagos, investors sign N844bn MoU on 4th Mainland Bridge

    The Lagos State Government and a consortium of private investors Wednesday signed a Memorandum of Understanding (MoU) to signal the commencement of the construction of the 38km 4th Mainland Bridge, expected to gulp about N844bn.

    The bridge is being constructed under the Build, Own and Transfer (BOT), concession of 40 years under a Public Private Partnership (PPP) initiative of the State Government.

    The consortiums to handle different stages of the mega project are Visible Asset Limited, Julius Berger Nigeria Plc, Hi-tech Construction Limited, J.P. Morgan, Eldorado Nigeria Limited, Nigerian Westminster Dredging and Marine, Africa Finance Corporation, AFC and Access Bank.

    The Bridge, among others would accommodate cyclists and pedestrians and feature two service areas as well as additional pedestrian crossing.

    The Bridge would also accommodate three Toll Plazas which are still being tested from financial point of view and it would serve as a major boost to the actualisation of the Lekki Master Plan.

    State Governor, Mr. Akinwunmi Ambode who spoke at the signing of the MoU held at the Banquet Hall, Lagos House, Ikeja, said that the need for the bridge had become imperative following the phenomenal growth of the State with a population of over 21 million people, which has in turn increased commercial activities and traffic gridlock across the metropolis.

    “This has made it imperative for us to have a 4th Mainland Bridge that will serve as an alternative route to the Eastern axis and decongest traffic in the State.

    “More importantly this bridge will provide the required transportation compliment to the rapidly growing industrial activities on the Eti-Osa – Lekki – Epe corridor of the State,” he said.

    He said the proposed alignment of the Bridge will pass through Lekki, Langbasa and Baiyeiku towns along the shoreline of the Lagos Lagoon estuaries, further running through Igbogbo River Basin and crossing the Lagos Lagoon estuaries to Itamaga Area in Ikorodu.

    The governor said the alignment will also cross through the Itoikin road and the Ikorodu – Sagamu Road to connect Isawo inward Lagos Ibadan Expressway at Ojodu Berger axis.

    He said the Bridge would be made up of eight interchanges to facilitate effective inter-connectivity between different parts of the State.

    “This structure will be a four-lane dual carriageway with each comprising three lanes and two metres hard shoulder on each side. The bridge will be constructed to have a generous median to allow for both future carriageway expansion and light rail facility. There is no gainsaying the fact that huge benefits will be derived from this project but most importantly, make life more comfortable for Lagosians,” he said.

    According to the governor, the Bridge testifies to the confidence the partners in the project have in the State Government and the Nigerian economy.

    Expressing optimism that the project would be delivered on a Win-Win framework for all investors, the governor said for the first time in the history of the State, the Government was embarking on the construction of a long-span bridge and expressway without Federal funding as the project is to be solely funded by the private sector.

    “I am delighted that this project which has been on the drawing board for quite some time is now set to become a reality. This again, is the continuity with improvement which we promised Lagosians.

    “We have started the process with the signing of this MoU which is an expression of the commitment of major stakeholders including the government and the consortium of consultants and investors to the delivery of the project within the scheduled time frame,” the Governor said.

    The project is to be financed by Africa Finance Corporation, Access Bank and other private investors who have already signified intention to be part of the construction, while Visible Assets Limited would be the coordinating firm.

    In his remarks, Executive Chairman of Visible Assets Limited, Mr. Idowu Iluyomade, said the project would go a long way to reduce traffic gridlock in the State and would provide job opportunities for Lagosians.

    He said aside improving the quality of life of the people, the Bridge would also be a big asset that would be handed to the Lagos State Government at the end of the concession, assuring that it would be delivered on schedule.

    Earlier, Commissioner for Works and Infrastructure, Engr. Ganiyu Johnson said that the Bridge when completed would utilise state of the art tolling system that will ensure free flow of traffic.

  • AFC unveils Africa Project Developers Initiative

    Africa Finance Corporation (AFC), alongside its development partners, has announced the launch of the Africa Project Developers Initiative (APDI).

    APDI is a think tank and network to promote and enable project development in Africa. It creates a platform that fosters continuous dialogue among members, standardises project development documentation, develops market benchmarks, enables knowledge transfer, leads and facilitates independent research and serves as a policy advocacy forum for the industry.

    A significant bottleneck in unlocking Africa’s infrastructure is the development of viable projects that meet the viability and bankability tests of financiers.

    African project development itself is a proven asset class, with an increasing number of projects successfully reaching financial close: Azura, Nigeria; Cenpower, Ghana; Cabeolica, Cape Verde; Henry Konan Bedie Bridge, Cote D Ivoire.

    The challenges experienced by developers require the establishment of an innovative and collective approach to addressing the issues. The average project development time span from concept to financial close is seven years.

  • AFC completes corporate restructuring

    The Africa Finance Corporation (AFC) has said it has completed its corporate restructuring exercise with conclusion of key appointments into its executive management team.

    AFC had in January this year implemented a new organisational structure with a view to increasing the corporation’s client responsiveness by creating sector clusters that would each be responsible for delivering all of AFC’s products to clients within those sectors.

    The re-organisation also aimed at simplifying the corporation’s structure and responsiveness.

    Chief executive officer, Africa Finance Corporation (AFC), Mr. Andrew Alli said the new organizational structure would assist AFC to achieve its goals noting that AFC was formed to provide financing solutions to infrastructure projects in Africa.

    He pointed out that while it has so far made considerable progress over the last eight years of operations, it nonetheless needed to reinvent itself at this point to sustain the momentum.

    “We believe that the new organization structure will put the AFC on the right path,” Alli said.

    In achieving these objectives, a number of changes have already been made at the executive level. Dr. Adesegun Akin-Olugbade was appointed Executive Director and Chief Operating Officer of AFC from his previous role as Executive Director, Corporate Services, taking on additional responsibilities for IT and the newly-established, Investor and Country Relations functions. He also remains as the Corporation’s General Counsel and Head of Legal Department.

    Akin-Olugbade, a Harvard Law School alumnus who graduated top of the Nigerian Law School Class of 1984 and is a pioneer executive of the AFC, has over 30 years’ experience in the legal profession and the financial services sector, having worked at both the technical and executive management levels, in the public and private sector, for leading commercial law firms, development banks and international financial institutions. He was previously General Counsel and Director of the African Development Bank and pioneer Chief Legal Officer and Head of Legal Services Department of the African Export-Import Bank.

     

  • AFC obtains $9.3m credit to tackle climate change

    Climate change investment in Africa just got a boost with the accreditation of Africa Finance Corporation (AFC) as a partnering institution to the Green Climate Fund (GCF), making it the fund’s first African development finance institution.

    AFC was invited by the GCF to consider becoming an accredited institution, and following submission of its application in early 2015, AFC has this month attained full accreditation.

    Accreditation by the GCF enables AFC to access GCF’s committed capital of US$9.3 billion; a pool of funds for climate change projects to be utilised by members for on-lending, grants, lines of credit, guarantees and other fiduciary functions.

    AFC intends to use the fund’s capital to further its investment in renewable energy, a priority sector for the corporation.

    AFC is the lead investor in the award winning Cabeolica project, a USD90 million, 26MW landmark renewable energy wind power project in Cape Verde and the first commercial scale public private partnership wind farm in sub-Saharan Africa providing over 20% of Cape Verde’ power needs.

    The GCF, with headquarters in Songdo Republic of Korea, is a fund operating within the United Nations Framework Convention on Climate Change (UNFCCC).

    GCF’s objective is to promote the paradigm shift towards low-emission and climate-resilient development pathways by providing support to developing countries to limit or reduce their greenhouse gas emissions and to adapt to the impacts of climate change, taking into account the needs of those developing countries particularly vulnerable to the adverse effects of climate change.

    Over time, the GCF is expected to become the main multilateral financing mechanism to support climate action in developing countries.

    With a total of 20 accredited entities, the fund is governed by a Board of 24 members and is initially supported by an Interim Secretariat.

    While commenting on the development, Andrew Alli, President & Chief Executive Officer, AFC said: “This is very positive news as it reinforces AFC’s status as a multilateral financial institution. Through partnering with the Green Climate Fund, AFC will have access to valuable resources to support investments across a variety of green projects, making a significant contribution to the global efforts to combat climate change.”