Africa Finance Corporation, the leading infrastructure solutions provider in Africa, has announced the issuance of its inaugural CHF150m Reg S senior unsecured benchmark Green Bond under the corporation’s $5bn Global Medium-Term Note programme, maturing 2025.
The issuance is also the corporation’s third CHF-denominated bond. The bond has a tenor of five years, carries a coupon of 1.205 per cent and is listed on the SIX Swiss Exchange. The bond is rated A3 by Moody’s Investor Services, in line with AFC’s GMTN programme.
It is also the first ‘Green’ CHF-denominated issuance from a supranational organisation in the Central and Eastern Europe, Middle East and Africa region.
The issuance underscores the corporation’s commitment to sustainable investing principles and builds on past successful green financing initiatives pursued by the corporation.
This includes participation in the Global Innovation Lab for Climate Finance since 2015, as well as becoming the first African development financial institution to secure accreditation with the Green Climate Fund.
The issuance also reaffirms the corporation’s commitment to championing sustainability in Africa, whilst diversifying its funding sources and broadening the suite of products and solutions available to clients. The objective is to significantly improve Africa’s human development, reduce poverty, increase job creation, industrialisation and climate resilience – goals 1, 8, 9 and 13 of the United Nations Sustainable Development Goals.
The net proceeds from the issuance will be used by the corporation to finance, refinance or invest in Eligible Green Projects meeting the Eligibility Criteria, such as the Djibouti Wind Farm and Singrobo Hydro Dam in Cote d’Ivoire.
Samaila Zubairu, President and Chief Executive Officer of AFC, commented on the issuance, saying, “Since CO2 emissions records began in 1751, Africa has been responsible for less than 0.01 per cent of all global emissions. Yet, despite its comparatively low contributions, it is anticipated that African economies will be significantly negatively affected in the absence of adaptation measures, with climate crisis such as droughts and cyclones becoming a more frequent crisis in recent years.
“The successful outcome of our debut green bond is therefore another important milestone in our strategy of building a diverse coalition of investors for Africa’s sustainable development. Further access to climate finance should accelerate the development and financing of climate mitigation and adaptation projects required to make Africa more resilient to the impact of climate change.”
Similarly, Banji Fehintola, Senior Director and Treasurer of AFC, sai on the issuance, “The bond will further boost AFC’s already robust liquidity levels whilst ensuring the Corporation’s continued focus on projects that are socially and environmentally impactful. This is AFC’s second successful issuance this year, amidst strenuous market conditions. We are pleased with the continued support from the Swiss investor community, which reflects sustained confidence in the corporation’s notes and is testament to the corporation’s credit-worthiness.”
The bond issuance was arranged by Credit Suisse AG and Renaissance Capital as joint lead managers and joint bookrunners.
