Africa Finance Corporation (“AFC” or “the Corporation”), the leading infrastructure solutions provider in Africa, today announces the successful issuance of its inaugural CHF150 Million Reg S senior unsecured benchmark Green Bond (the “Bond”) under the Corporation’s US$5 Billion Global Medium-Term Note (“GMTN”) programme , maturing 2025 (“the CHF150 million Green Bond ” or “the bond issuance”).
The issuance is also the Corporation’s third CHF-denominated bond. The Bond has a tenor of five years, carries a coupon of 1.205% and is listed on the SIX Swiss Exchange. The Bond is rated A3 by Moody’s Investor Services, in line with AFC’s GMTN programme. It is also the first Green CHF-denominated issuance from a supranational organisation in the Central and Eastern Europe, Middle East and Africa (CEEMEA) region.
The issuance underscores the Corporation’s commitment to sustainable investing principles, and builds on past successful green financing initiatives pursued by the Corporation. This includes participation in the Global Innovation Lab for Climate Finance since 2015, as well as becoming the first African Development Financial Institution to secure accreditation with the Green Climate Fund.
The issuance also reaffirms the Corporation’s commitment to championing sustainability in Africa, whilst diversifying its funding sources and broadening the suite of products and solutions available to clients. The objective is to significantly improve Africa’s human development, reduce poverty, increase job creation, industrialisation and climate resilience – goals 1, 8, 9 and 13 of the UN’s Sustainable Development Goals.
The net proceeds from the issuance, will be used by the Corporation to finance, refinance or invest in Eligible Green Projects meeting the Eligibility Criteria (as defined in its Green Bond Framework), such as the Djibouti Wind Farm and Singrobo Hydro Dam in Cote d’Ivoire. Selected eligible green projects can be seen in the Green Bond Framework.
The Framework is further aligned with the International Capital Market Association’s (ICMA) Green Bond Principles and the sustainability quality of the asset pool, which have been evaluated as positive by ISS ESG.
Samaila Zubairu, President & CEO of AFC, commented on the issuance: “Since CO2 emissions records began in 1751, Africa has been responsible for less than 0.01% of all global emissions. Yet, despite its comparatively low contributions, it is anticipated that African economies will be significantly negatively affected in the absence of adapation measures, with climate crisis such as droughts and cyclones becoming a more frequent crisis in recent years.
“The successful outcome of our debut green bond is therefore another important milestone in our strategy of building a diverse coalition of investors for Africa’s sustainable development. Further access to climate finance should accelerate the development and financing of climate mitigation and adaptation projects required to make Africa more resilient to the impact of climate change.”
Banji Fehintola, Senior Director & Treasurer of AFC, also commented on the issuance: “The bond will further boost AFC’s already robust liquidity levels whilst ensuring the Corporation’s continued focus on projects that are socially and environmentally impactful. This is AFC’s second successful issuance this year, amidst strenuous market conditions. We are pleased with the continued support from the Swiss investor community, which reflects sustained confidence in the Corporation’s Notes and is testament to the Corporation’s credit worthiness.”
The bond issuance was arranged by Credit Suisse AG and Renaissance Capital as Joint Lead-Managers and Joint Bookrunners.
Notes to Editors
About AFC – www.africafc.org
AFC, an investment grade multilateral finance institution, was established in 2007 with an equity capital base of US$1 billion, to be the catalyst for private sector-led infrastructure investment across Africa. With a current balance sheet of approximately US$6.6 billion, AFC is the second highest investment grade rated multilateral financial institution in Africa with an A3/P2 (Negative outlook) rating from Moody’s Investors Service. AFC successfully raised US$700 million in 2020 so far, US$1,150 million (US$650 million and US$500 million) in 2019, US$500 million in 2017 and US$750 million in 2015 through Eurobond issuances; out of its Board-approved US$5 Billion Global Medium-Term Note (MTN) Programme. All Eurobond issues were oversubscribed and attracted investors from Asia, Europe and the USA. The Corporation has also successfully issued and/or secured loan facilities from the Far East, including PR China, Japan, and South Korea.
AFC’s investment approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and risk capital to address Africa’s infrastructure development needs and drive sustainable economic growth. AFC invests in high-quality infrastructure assets that provide essential services in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications. To date, the Corporation has invested over US$8.0 billion in projects within 32 countries across Africa.
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