African financial company obtains a $255 million loan to support the development of eco-friendly infrastructure in Africa
Africa Finance Corporation Secures Significant Sustainability-Linked Loan from UAE Banks
The Africa Finance Corporation (AFC) has made history by securing a $255 million UAE Dirham (AED 937.5 million) loan facility from a consortium of banks in the United Arab Emirates region. This marks AFC's inaugural sustainability-linked loan sourced from the UAE market, a milestone in both green capital access and financial cooperation between Africa and the Gulf region.
This deal diversifies AFC's funding sources by tapping into the UAE Dirham market, enhancing financial symbiosis between Africa and the Gulf financial institutions. The facility embeds sustainability performance into financing terms, aligning AFC’s capital raising efforts with its mission to promote infrastructure-driven economic growth and industrial development across Africa in a sustainable manner.
The structure of the facility is based on Sustainability Performance Targets (SPTs). Once the SPTs are achieved, AFC can unlock lower borrowing costs. This innovative financing model further highlights AFC's streak of ambitious funding milestones, building on its growing momentum in green finance.
AFC has pushed boundaries with green finance, including a CHF150 million green bond in 2020 and a $30 million equity investment tied to green shares from the African Development Bank in 2024. The UAE is increasingly positioning itself as a climate finance hub, and this deal underscores a growing financial symbiosis between Africa and the Gulf.
The deal strengthens partnerships with UAE banks, reflecting deepening financial ties and shared commitment to sustainable infrastructure development on the African continent. The facility was orchestrated by a group of UAE financial institutions, including Abu Dhabi Commercial Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreqbank, and the National Bank of Ras Al Khaimah. Emirates NBD acted as the Facility Agent in the transaction, while Mashreqbank served as the Global Coordinator and Documentation Agent, and First Abu Dhabi Bank served as the Sustainability Coordinator.
The deal signifies a shift towards green capital on the African continent. Enhancing AFC’s capability to finance large-scale renewable energy and sustainable infrastructure projects, such as its stake in Africa’s largest renewable energy platform, Lekela Power, which provides over 1 GW of clean power and significantly reduces CO₂ emissions.
Overall, this facility is a landmark in mobilizing green capital from the Gulf region to finance Africa’s sustainable infrastructure. It demonstrates innovative financing aligned with sustainability targets and deepens cross-regional collaboration between African financial institutions and UAE banks. Banji Fehintola, Executive Board Member and Head of Financial Services at AFC, described the deal as a significant step in AFC's journey.
The Africa Finance Corporation's (AFC) recent deal with UAE banks marks a significant stride in environmental-science, as the facility is based on Sustainability Performance Targets (SPTs) that encourage AFC to unlock lower borrowing costs upon achieving these goals. Furthermore, the infusion of $255 million UAE Dirham (AED 937.5 million) will bolster AFC's finance and business endeavors, allowing for more investments in climate-change mitigation projects, such as renewable energy ventures like Lekela Power.
