AFC Secures US$400 Million Shariah-Compliant Facility, Marking Return to Islamic Finance Market

Originally launched at US$300 million, the facility was upsized to US$400 million due to robust investor interest, resulting in a 47% oversubscription.

Africa Finance Corporation (AFC) (www.AfricaFC.org), the continent's leading provider of infrastructure solutions, has successfully closed a US$400 million Shariah-compliant Commodity Murabaha facility. This significant achievement marks AFC's return to the Islamic finance market after eight years and underscores its commitment to diversifying funding sources while expanding access to ethical and sustainable financing for Africa's infrastructure development.

Originally launched at US$300 million, the facility was upsized to US$400 million due to robust investor interest, resulting in a 47% oversubscription. The transaction attracted participation from eleven leading Islamic financial institutions, including new partnerships with Abu Dhabi Islamic Bank PJSC, Al Rajhi Bank, and Emirates Islamic Bank.

Samaila Zubairu, President and CEO of AFC, stated, "This transaction reaffirms AFC's role as a bridge between global capital and Africa's most urgent infrastructure needs. The overwhelming demand demonstrates strong confidence in our investment strategy and highlights Africa's growing importance in the Islamic finance landscape. By expanding our international funding sources, we continue to create innovative financial solutions that drive impactful and sustainable development across the continent."

Key Institutions and Transaction Highlights

Emirates NBD Capital Limited, First Abu Dhabi Bank PJSC, and SMBC Bank International Plc acted as Joint Lead Arrangers and Bookrunners, reinforcing AFC's strong relationships with prominent global financial institutions.

The transaction builds on AFC's successful history in Islamic finance, including its groundbreaking US$230 million Sukuk issued in 2017—the first-ever by an African supranational entity. AFC has continually broadened its funding portfolio through innovative transactions that attract global investors to African infrastructure projects.

In January, AFC raised US$500 million from its first perpetual hybrid bond. That same month, AFC received the highest possible credit ratings from S&P Global (China) Ratings and China Chengxin International Credit Rating Co. Ltd (CCXI) in preparation for a potential panda bond issue.

Commitment to Ethical and Sustainable Finance

The Murabaha financing facility was structured in accordance with standards set by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), ensuring full compliance with global Islamic finance principles. Islamic finance, including Murabaha structures, emphasizes asset-backed financing, risk-sharing, and the prohibition of speculative practices, aligning with AFC's mission to foster responsible investment that promotes long-term infrastructure development and economic stability in Africa.

Banji Fehintola, Executive Board Member and Head of Financial Services at AFC, commented, "Islamic finance plays a growing role in our funding strategy, helping us tap into a diverse pool of investors who share AFC's commitment to sustainable and responsible investing. The success of this Murabaha facility highlights the strong appetite for African infrastructure investments and underscores AFC's ability to structure transactions that meet global investor expectations."

Supporting Transformative Infrastructure Projects

Proceeds from the 3-year Murabaha financing will support AFC's mission to accelerate industrialization, infrastructure development, and economic growth across Africa. Notable projects include Xlinks in Morocco, a pioneering initiative designed to supply sustainable electricity from the Sahara to the UK. Additionally, through the acquisition of Lekela Power and in partnership with Cairo-based Infinity Power, AFC is now Africa's largest investor in clean energy, targeting 3GW of renewable capacity by 2026.

This successful transaction further solidifies AFC's role as a key player in mobilizing global capital for Africa's infrastructure transformation, fostering sustainable development, and promoting economic resilience across the continent.