What is the rationale behind having both public and private shareholders?

The public sector shareholding gives AFC important access to government, which is critical in Africa for sustainable investments in infrastructure. Having African financial institutions so actively involved promotes synergy between African banks, broadens our reach and strengthens local support and partnership. The African industrials and corporations on our board help integrate local corporate experience, and strengthen support from leading local sponsors.

What is AFC’S current credit rating?

In 2014 AFC received its first international credit rating from Moody’s Investors Service, with an A3 (long term)/P2 (short term) foreign currency debt rating, making the Corporation the second highest investment grade rated multilateral financial institution on the African continent. This credit rating was reaffirmed in April 2015 and again in 2016.

What are AFC’s priorities by geography and project type?

Our focus is on private sector-led investments by credible local and international sponsors in our focus sectors. We selectively work with government-owned enterprises and agencies, so long as such projects are structured on a bankable, private sector basis. Our projects may be greenfield developments, brownfield expansions, early stage capital, acquisitions, refinancing or working capital. We are able to finance across the entire capital structure of a company or project, insofar as it lies within our focus sectors of – power (electricity), natural resources (oil, gas and mining), heavy industry (fertilizer, cement, material processing, fabrication), transportation (vessels and infrastructure), and telecommunications. 

How many partners does AFC have?

To execute its mandate, AFC has established partnerships regionally, with other institutions such as the African Development Bank, African Export-Import Bank, PTA Bank, Islamic Development Bank, Banque Ouest Africaine de Development, the Nigerian Sovereign Investment Authority and internationally with the China Africa Fund, the Infrastructure Development Finance Company of India, the Dutch development bank FMO and the US Government through USAID and the US Presidential “Power Africa Initiative”. Government through USAID and the US Presidential “Power Africa Initiative”.

What are the major risks to AFC’S business?

AFC faces risks similar to all infrastructure financiers globally, including sovereign and project specific risks. These risks are across a broad spectrum of areas but range from issues relating to sponsor quality, product off-take, commodity prices, feedstock supply, operations and maintenance, construction completion, reputational, environmental, health, safety, and regulatory stability.

How are these risks mitigated?

In all its projects, AFC employs a robust risk management framework that aims to identify, quantify and mitigate or manage all risks associated to each project. The organisation operates in accordance with international standards of private equity and project finance, and all members of our teams from origination through execution and transaction monitoring are highly trained and equally focused on managing risks in the transactions that we work on.

What is AFC’S CSR and environmental sustainability strategy?

AFC has an approved Environmental and Social Risk Management Policy to ensure that it carries out its lending, investment and advisory services to its clients and counter parties in a manner that is environmentally sound and ensures sustainable development.

AFC is committed to ensuring that the investments it makes are:

  • Socially and environmentally sustainable
  • Respectful of the rights of affected communities
  • Structured and operated in compliance with the relevant regulatory requirements and with the best international practice

Environmental sustainability is crucial to AFC’s investment selection criteria. It saves money over the investment’s lifespan and increases the probability of the project succeeding. For instance, taking water conservation into consideration in the design of a solar energy farm is not only environmentally positive but also results in substantial savings during the operational life of the plant.

In addition, ensuring that an infrastructure development has no adverse effect on a sensitive ecosystem and that it protects the animals and their habitats means that there is the potential for a tourism industry to thrive, bringing economic prosperity to a region.

In the event that impact on the environment is unavoidable, or the successful conclusion of projects will affect local communities through displacement or other significant impact, AFC will ensure that such impact is reduced, mitigated or that appropriate compensation is provided.

What does the next 10 years look like for AFC?

AFC’s unique position as both a financier and project developer enables us to attract investment into the Continent’s infrastructure from more markets around the world. The recent success of our CHF Bond issue, and our maiden Sukuk, are perhaps amongst the best examples of this.

As we turn to our next decade, our near-term strategy is to become a US$5 billion Corporation by 2019. Though Africa’s slow growth climate is expected to last for the foreseeable future, many countries such as Cote d’Ivoire, Rwanda, Tanzania and Ethiopia are registering impressive growth, and key to their success has been economic diversification.

We therefore will continue to finance and develop the continent’s much-needed infrastructure projects, focusing on those that will make the biggest contribution to driving economic and social development, and to job creation in the local communities. It is through investments such as these that we will create a brighter and more prosperous future for Africa.