A leading pan-African multilateral development finance institution and project developer, Africa Finance Corporation (AFC), has issued its maiden Sukuk – which the highest-rated Sukuk issuance from an African institution. After attracting high levels of investor interest, the initial target of 100 million USD was more than twice oversubscribed, resulting in the transaction being upsized to 150 million USD and a final order book of approximately 230 million USD. The transaction represents the first Sukuk to be issued by an African supranational entity, and also the first Sukuk transaction in 2017.
The Sukuk is AFC’s second foray into Islamic finance; the corporation accepted a 50 million USD 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.
Andrew Alli, President and CEO of AFC, commented on the announcement: “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.”
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. In 2015 AFC’s inaugural 144A/Reg S, US$750 million 5-year international bond was more than six times oversubscribed at over US$4.7 billion, attracting institutional investors from across Asia, Europe, Middle East and the United States.