Pan-African infrastructural financier Africa Finance Corporation (AFC) is seeking to diversify its shareholding to enable it continue funding key projects.
The financier contends that increasing its shareholding base would be critical in mobilising resources as it keeps an eye on sub-Saharan Africa’s need for infrastructure financing.
AFC estimates that Africa needs $100 billion annually to invest in infrastructure projects so as to accelerate economic growth by as much as 2.6 per cent a year.
“Africa’s governments recognise the problem, but they have neither the financial resources nor the technical ability needed to close the gap by themselves. Private capital and expertise must be mobilised,” said a report by the corporation.
The AFC currently boasts a membership of 17 countries and has managed to raise $1.2 billion in new capital over the past three years. It is targeting $3 billion under its Global Medium Term Notes Program.
Since its establishment in 2007, AFC has invested approximately $4 billion in projects across 28 African countries. In 2016, the corporation invested a total of $688 million, both in debt and equity financing.
African Reinsurance Corporation (Africa Re) now becomes the latest member of AFC, advances the lender’s growth strategy for its country membership and greater diversification of its shareholding.
“We look forward to collaborating with Africa Re to provide innovative solutions to the development and financing of infrastructure assets in Africa,” said Andrew Alli, AFC president and chief executive.
Africa Re is the first multilateral financial institution to become a member of AFC.
Although 55 per cent of AFC’s projects are concentrated in West Africa, the corporation is determined to increase its presence in East Africa after Kenya became a member in June last year, joining Uganda and Rwanda, which joined in 2015.
Negotiations are ongoing to have Tanzania also become a member.