AFC to fund infrastructure development in Africa through new facility - CNBC Africa

AFC to fund infrastructure development in Africa through new facility

Western Africa

by Dara Rhodes 0

"The facility from GED, which is the German finance institution, and FMO, the Dutch finance institution, is a seven-year 60 million facility and was provided to AFC to enable us to expand our investment capacity across the continent. For us this is quite significant," AFC director and chief finance officer Adesola Adedutan told CNBC Africa.

Prior to the facility, the AFC used their environment and social policy systems, as environmental and social policy are key pillars in AFC's investment philosophy across Africa. The partnership with GED is for the enhancement of the AFC systems was therefore in line with the corporation’s Africa objective.

"The days of investment without taking care of the environment we believe are gone, all over the world and specifically in Africa,” Adeduntan said.

"Nigeria definitely is going to be a major beneficiary of this increased fire power that AFC is acquiring."

Adeduntan added that the fact that Europe is comfortable with the credit levels of AFC makes it easier for the corporation to proceed with its infrastructure development plans in Africa, as well as expanding the facilities objectives.

For transactions in francophone African countries, a Euro Tranche has been made available to the AFC, therefore reducing or eliminating currency rates that come with investing in Franco-phone African countries.

The AFC however requires more funding by trying as much as possible to merge their assets with their liabilities, as such funding is usually not easily available in the commercial market.

“We have 5 key strategic sectors of focus. Power is a major sector for us. Natural resources such as mining are very important to us. Telecoms infrastructure and last but not least, heavy industry, which comprises of materials that are required to build infrastructure such as cement, steel, iron, aluminum," said Adeduntan.

By Dara Rhodes in Lagos, Nigeria.