Africa Finance Corporation (AFC), an investment grade multilateral finance institution, has secured a $250m tier-2 capital loan from US International Development Finance Corporation (DFC).

The facility will strengthen AFC’s  investment capacity by enabling it to provide competitive financing solutions for closing Africa’s infrastructure deficit.

It also further complements AFC’s strategy of diversifying its investor base.

Samaila Zubairu, President & CEO of Africa Finance Corporation, said: “Africa and the United States have enjoyed a longstanding partnership spanning several decades. Indeed, AFC has partnered with the US on several infrastructure initiatives, including the Power Africa initiative, and regularly receives investments from US-based investors in its Eurobond issuances.”

“This announcement therefore marks a natural evolution as the US Government seeks to play a greater role in Africa’s development by establishing a dedicated DFI. Crucially, this funding will also ensure the Corporation is able to continue fulfilling its objectives in the wake of the ongoing COVID-19 pandemic, which has placed a greater responsibility on development finance institutions in helping to drive a sustainable recovery across Africa.”

Adam Boehler, CEO of DFC, added: “DFC is proud to expand our relationship with a key infrastructure investor in Africa. This financing advances DFC’s strong commitment to Africa by supporting investment in the modern infrastructure that is essential to economic growth and expanded connectivity with the world.

Formed in December 2019, DFC is the US Government’s development bank established with a lending capacity of up to $60bn to provide financing for solutions to some of the most critical challenges facing the developing world. DFC expanded and modernized the tools of the Overseas Private Investment Corporation (OPIC).