Johannesburg — THE African Development Bank has invested 50 million US dollars into Africa Finance Corporation equity to strengthen partnership in financing infrastructure development projects in Africa.
The Bank Group's investment in AFC will enable both institutions to accelerate infrastructure development and delivery on the continent by deepening co-financing opportunities, joint implementation, knowledge transfer and capacity development for the benefit of Africa.
The addition of the African Development Bank Group as a shareholder and development finance institution member of AFC complements the Corporation's strategy of addressing Africa's infrastructure deficit.
It also marks a further step in the Bank's undertaking to help reduce poverty, improve living conditions for Africans and mobilize resources for the continent's economic and social development.
The equity investment in AFC further broadens its shareholder base and follows recent equity investments in the Corporation by African Re- Insurance Corporation and the Republic of Ghana.
The African Development Bank Group will have representation on the AFC Board of Directors as part of the equity investment.
"This is a watershed moment for Africa Finance Corporation. It gives us credibility and endorsement any finance development institution working in Africa needs," said AFC's Executive Director, Sanjeev Gupta.
He said AFC has been a profitable institution that has focused on infrastructure investment and development needs whilst delivering competitive financial returns to shareholders who include the Central Bank of Nigeria, UBA bank, Ecobank, Ghana, Africa Reinsurance.
Gabon and Mauritius have expressed commitment to become shareholders in the institution, he said. He said AFC was established with 1.1 billion US dollars capital which had increased to reach 1.8 billion US dollars.
"Last year we paid dividend to shareholders keeping them happy. We've never gone back to ask for more capital," he said.
He said the main challenge they face as a development finance institution was not funds but finding bankable projects to finance.
"Funding has been a lesser of the challenge to us. Finding projects to fund has been the main challenge," he said.
AfDB's Vice President for Private Sector, Infrastructure and Industrialization, Pierre Guislain said the Group shared AFC's vision of developing Africa's led responses to socioeconomic development needs. He said the two have worked jointly in co-financing infrastructure development projects with tangible impact over the years.
"This development is therefore a natural evolution in our partnership, which in turn, will result in delivering solutions to Africa's infrastructure challenges at a faster pace. "These solutions will adopt the highest standards, generate value to stakeholders, and foster sustainable development and economic growth across the African continent."
AFC is a Multilateral Financial Institution, created by sovereign African states to provide pragmatic solutions to Africa's Infrastructure deficit and challenging operating environment, by developing and financing infrastructure, natural resources and industrial assets, for enhanced productivity and economic growth of African States.