Infrastructure solutions provider Africa Finance Corporation (AFC) has successfully closed a €150-million ten-year loan facility with European development finance institutions Deutsche Investitions-und Entwicklungsgesellschaft (DEG) and Proparco.
The new credit facility supports the development and implementation of infrastructure projects that enhance the continent’s economic, environmental, or social impact under AFC’s Establishment Agreement and Charter.
DEG, a subsidiary of Germany’s State-owned KfW Group, has provided financing, advice and support to enterprises in developing and emerging-market countries since its inception in 1962.
The transaction builds on a partnership with AFC that started in 2012 and has resulted in several loans from DEG, including a recent $170-million 12-year loan in 2021.
DEG banking and German business head Petra Kotte says the loan contributes to closing Africa’s infrastructure gap, positively impacting on the livelihood of surrounding communities and supporting AFC in its endeavour to reduce the continent’s footprint as part of its dedicated climate resilience strategy.
Proparco – the private sector financing arm of Agence Française de Développement Group (AFD Group) – has been promoting sustainable economic, social and environmental development by providing funding and support to businesses and financial institutions in Africa, Asia, Latin America and the Middle East for over 45 years.
Proparco’s action focuses on key development sectors including infrastructure, mainly for renewable energies; as well as agribusiness, financial institutions, health and education.
Proparco provided AFC in 2021 with a $50-million senior credit line in the $170-million syndicated loan led by DEG.
Proparco lending operations global head Emmanuelle Drouin says infrastructure in Africa remains one of the continent’s biggest challenges, notably in terms of access to clean energy and transport.
“AFC is also a member of the International Development Finance Club, chaired by AFD since 2017, and we commend its strong commitment to supporting climate resilient infrastructure and to accelerating the just transition in Africa, as evidenced during the COP27,” she says.
AFC senior director and treasury and financial institutions head Banji Fehintola says the strategic partnership with DEG and Proparco mobilises urgently-needed capital to rebuild Africa with more resilient and sustainable infrastructure across critical sectors.
“As part of AFC’s strategy to catalyse infrastructure financing and impact development in Africa, the corporation draws capital from a diverse range of international investors and lenders. We appreciate the confidence that DEG and Proparco continue to demonstrate in us as a strategic partner and infrastructure solutions provider,” he adds.