Throughout the pandemic, AFC has provided a lifeline to communities across the continent through the continued operation of our investee companies and borrowers in critical sectors including power e.g. the 80MW peat-fired independent power plant in Rwanda and the 44MW Singrobo hydro project in Cote D’Ivoire, and ports e.g. the Takoradi Port project in Ghana and the ARISE Mauritania project.

Our continued disbursement of funds for construction projects minimised the loss of direct/indirect jobs through the critical phase of the pandemic.

Fast-tracked loans to telecoms operators (like MTN Nigeria) to expand digital infrastructure – supported ‘work from home’ initiatives to reduce the spread of COVID-19.

In the COVID-19 context, MTNN witnessed increased demand for data services with data traffic up 130% and data revenues up by c.59.2% year-on-year – driven by increased smartphone and broadband usage due to unprecedented levels of remote working. Improved network capacity thus enabled MTNN to capitalise on consumer demand and ensure it had adequate infrastructure to capture future potential growth.

(I) Mobilising c.US$2bn through AFCs initial US$140 million

Through our US$140 million initial investment (at the time our largest single equity investment in Gabon), ARISE has attracted EUR1bn of extra financing from Stoa, Meridian, AP Moller Capital and more, and US$700mm in debt financing from BGFI Bank, Afreximbank, GuarantCo and African Development Bank.

(ii) Attracting and leveraging strong strategic partners

We attract and develop long-term strategic partnerships that ensure sustainable development of projects, such as the 60MW Djibouti Wind Farm Project where AFC took up the project as a lead developer, attracting Dutch Development Finance Corporation and Climate Fund Managers (a climate investment fund manager) as co-investors. The Project is pivotal as Djibouti aims to transition towards 100% renewable energy-based electricity production and reduce its emissions by 40% by 2030. The project will significantly reduce GHG emissions in the country’s HFO dominated (90%) electricity sector.

AFCs partnership with FMO and CFM resulted in many firsts being achieved on the project, including the first grid-scale IPP in Djibouti to use all sponsor equity bridge financing to accelerate the development of the project. The project is on target for commissioning in December 2021 to deliver first power to the nearly 1 million population. Since AFC’s investment, various other projects have been initiated with the government including Engie’s 30MW solar plant in the Grand Bara desert and the 35MW CREC Energy Biomass plant.

AFC invested US$86MM in the Segilola Gold Mine in Osun State, Nigeria, sponsored by Thor Explorations Limited. Segilola is the largest, most advanced institutional quality gold mining project in Nigeria, in addition to being one of the highest-grade reserves in West Africa.

The project is expected to produce 81,000 ounces of gold per year over its initial 5-year span. Our landmark investment opened up the Nigerian Mining Sector (a top priority for the Nigerian Federal Government) to Foreign Direct Investment, further diversifying the economy away from reliance on oil and gas. In addition, the AFC has been an active advisor to the Nigerian Ministry of Mines on how to attract more capital to the country and develop this sector to rival the success of the upstream hydrocarbon industry.

The COVID-19 pandemic highlighted the urgent need to expand African manufacturing, positioning Africa as a viable alternative to manufacturing in China and elsewhere, reducing the carbon footprint from global shipping and creating essential jobs for Africa’s young population. We are achieving this through a tried and tested model introduced in Gabon to other countries including Benin and Togo – the ARISE Special Economic Zone (ARISE IIP). ARISE IIP through the Nkok SEZ, the first carbon neutral zone in the world, has transformed the Gabonese economy by developing infrastructure, enhancing industrial competitiveness and building a business-friendly ecosystem in Gabon through a joint venture between Africa Finance Corporation, Olam International Ltd. and the Republic of Gabon. AFC invested US$140 million alongside its partners to build a flourishing ecosystem around the forest-wood industry. This included a new mineral terminal, a general logistics terminal, and other infrastructure projects. As a result, Gabon’s earnings have increased from €30 to €180 per cbm of wood – and in some cases up to €40,000 per cbm of wood; 30,000 jobs have been created with US$1bn contributed to the country’s GDP. The Nkok SEZ is the highest exporter of veneer wood.

Through a further US$150 million investment by AFC at the height of the pandemic, the Gabon model is being replicated by ARISE in Togo – with Plateforme Industrielle d’Adétikope (PIA) inaugurated to create thriving textile industry value chain, and Benin SEZ – aimed at creating cashew and cotton value chains. The Togo and Benin SEZs are expected to add US$3bn to GDP, US$4bn in exports and impact over 600,000 farmers.

AFC takes the lead on projects and early-stage risk by providing project development capital and structuring expertise, i.e. handling the project through to bankability and financial close. There is a dearth of bankable projects in Africa, and project development is the key, with AFC demonstrating this in the power space through our many ‘firsts’: the 350MW Cenpower gas to power project; 60MW wind project in Djibouti; and in the mining space, our 10million mtpa bauxite mine in Guinea; a gas pipeline in the oil and gas space; and a refinery and storage terminal in West Africa in the heavy industry sector.

Through our world class project development asset class, we assist project sponsors in the journey towards achieving project bankability – to unlock the bottleneck associated with infrastructure development on the continent.

Governments also need to be supported to invest in social and hard infrastructure to support economic recovery in their countries. Partnerships with governments are also key in supporting their national development plans and ambitions. COVID-19 has meant that government reserves and balance sheets have been stretched, shifting focus on priority sectors such as healthcare that have become constrained. This leaves little for governments to invest in infrastructure and industry, which are core to supporting the economic recovery.

Consequently, the private sector has to increasingly support governments through innovative sovereign lending solutions and public-private partnerships. AFC is leading this through its product solutions desk, focusing on sovereign lending and off-balance sheet structures. Two recent important transactions are supporting the government of Cote D’Ivoire primarily in its roads programme, and the government of Tanzania on its water, social infrastructure and transport projects.

In addition, the partnership with the Nigerian government on its infrastructure vehicle, Infrastructure Corporation of Nigeria (InfraCo) is another important initiative co-led by the Central Bank of Nigeria (a 42% shareholder in AFC) and the Nigeria Sovereign Investment Authority (NSIA). With initial seed capital of N1tn ($2.5bn) from the promoters, the government expects it to grow to N15trn within a few years. InfraCo will focus on delivering public and private sector projects from origination to portfolio management and exits. Nigeria is Africa’s largest economy with the largest population – but it has a significant infrastructure deficit. This requires capital and expertise to bridge, which InfraCo can provide.