Africa Finance Corporation raises $389m, 1bn Yn loan from Japanese capital market

Africa Finance Corporation AFC, the leading provider of infrastructure solutions in Africa, has successfully closed a $389 million dual currency samurai term loan facility, divided into $382 million and JPY ¥1 billion. The transaction marks AFC’s second foray into the Japanese capital markets, following an inaugural Samurai loan facility in 2019, when the Corporation raised $233 million and JPY 1 billion. The 3-year term is an important step as AFC builds a coalition of investors to diversify its funding sources, including more institutional capital from Asia and existing partners in Europe and North America.

Japanese investors showed strong interest in the issue with Mizuho Bank Ltd, MUFG Bank Ltd. (“MUFG”), Sumitomo Mitsui Banking Corporation acting as mandatory lead arrangers and book brokers. Other participating financial institutions include Bank of Yokohama, Norinchukin Bank, Shiga Bank, and Gunma Bank. Proceeds from this facility will be used for general corporate purposes. AFC has a strong track record in Asian capital markets, issuing a $300 million credit facility through the Export-Import Bank of China in 2018 and a $140 million Kimchi term loan facility in 2019. Asia is key for Africa’s next phase of growth and Japan, in particular, is a major player as the country has shifted the focus of its engagement with Africa in recent years from providing aid to increasing investment.

The Japanese government, shifting its focus from aid to investment, recently pledged $30 billion over the next three years for the resilient and sustainable development of the African continent. The announcement was made during the recently concluded eighth Tokyo International Conference on African Development TICAD, signalling a boom in economic relations between Africa and Asia. Banji Fehintola, Senior Director and Treasurer of AFC, said: “Asia is a very important region for us and the participation of Asian investors in our bond issues has grown significantly over time. The success of this loan offering is testament to AFC’s ability to diversify its funding sources in mobilising global capital to build critical infrastructure in Africa and transform lives.”