Africa Finance Corporation (AFC), a leading pan-African multilateral development finance institution and project developer, has issued its maiden Sukuk, the highest-rated ever Sukuk issuance from an African institution.
The Sukuk is AFC’s second foray into Islamic finance; the corporation accepted a US$50 million 15 year line of financing from the Islamic Development Bank (IDB) in 2015 to finance Islamic Finance-compliant projects located across the numerous African IDB member countries.
Following high levels of investor interest, the initial target of US$100 million was more than twice oversubscribed, resulting in the transaction being upsized to US$150 million and a final order book of approximately US$230 million. In addition to being the first Sukuk transaction of 2017, it is also the first Sukuk to be issued by an African supranational entity.
While commenting on the announcement, President and CEO of AFC, Andrew Alli commented: “The core values of Islamic finance, the need to invest ethically in assets that have a tangible positive social impact, made a Sukuk issuance a natural choice for us. We offer global investors the chance to be involved in high-impact infrastructure projects that not only promote social and economic development across Africa but also generate economic returns for our investors.
“This Sukuk represents a milestone in our financing activities, a milestone that will enable us to further diversify our funding sources, to build new relationships with key investors in international markets and help us diversify our portfolio of projects to continue delivering real impact across the continent,” he added.
CEO of Emirates NBD Capital, Ahmed Al Qassim stated that: “Emirates NBD Capital is delighted to have supported the inaugural US$150 million 3 year Sukuk issuance. The successful completion of the transaction is a testament to AFC’s standing with the international investor community and AFC’s commitment to develop new sources of funding.
“As the Sole Global Coordinator for the Sukuk, Emirates NBD Capital continues to lead the development of international Sukuk as a product and providing our clients with unique solutions to meet their funding requirements,” he said.
AFC has a diverse funding base, with a range of funding from sources across different markets. Last year the corporation issued its debut Swiss Franc denominated long three-year bond, raising CHF 100 million, and accepted a US$150 million 15 year loan facility from KfW Development Bank.
The Corporation will celebrate its 10th anniversary in 2017 at the AFC Live Summit, which will bring together many of the top international players in African infrastructure investment for high level discussions on the industry’s many challenges, and potential solutions.
