Mitsubishi UFJ Financial Group and African Export-Import Bank have agreed to a $520m facility to mitigate the impact of COVID-19 pandemic.
A joint statement issued by both organisations on Monday stated that it was the first to be covered by Nippon Export and Investment Insurance.
According to the statement, NEXI’s proactive support for the facility was agreed on the basis of Afreximbank being a strategic partner, participation from Japanese investors and the deal contributing to the United Nations’ Sustainable Development Goals.
“These objectives find common ground with NEXI’s objectives of supporting sustainable African growth and development in line with the Tokyo International Conference of African Development objectives.
“Afreximbank will use the proceeds toward its Pandemic Trade Impact Mitigation Facility which was launched in March 2020 to help African sovereigns, commercial banks and corporates to weather the impact of the crisis due to the COVID-19 pandemic,” the statement said.
The facility would finance trade and trade related investments which contributes to the sustainable development of the socioeconomic, health, manufacturing, environmental, agriculture and agri-related sectors across the 51 African member states of Afreximbank.
“Working together with NEXI and Afreximbank, MUFG was able to access under-utilised Japanese liquidity, resulting in an extremely successful outcome of distribution to Japanese investors, many of which were new investors for Afreximbank.
“This follows in the footsteps of two Samurai loans for Afreximbank in 2017 and 2019, including the largest ever Samurai loan for an African issuer,” it added.
Commenting, Head of Emerging Markets at MUFG, Christopher Marks, said, “It goes without saying that we are delighted to have once again, partnered Afreximbank, who are not only leading the way in terms of bringing in new investment and growth opportunities to Africa, but also providing vital support to the region in the face of the COVID-19 pandemic.”
Afreximbank’s Executive Vice President for Business Development and Corporate Banking, Amr Kamel, said the successful implementation of the facility was a testimony to the great collaboration and innovative approach adopted by MUFG, NEXI and Afreximbank.
“We expect strong and sustainable development outcomes by effective implementation of this facility, including employment creation, increased economic activities and increase in tax revenues for fiscally strained governments, amongst other outcomes,” Kamel said.
