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Strategic Partnership for Africa's Growth: AFC and AfDB Seal $350M Deal for Infrastructure Advancement

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Joel Arnold

Dec 28, 2023

Empowering Sustainable Development: AFC and AfDB Collaborate to Fuel Economic Growth in Africa

(l-r) AFC Board Member and Executive Director of Financial Services, Sanjeev Gupta and AfDB Vice President Solomon Quaynor shake hands after signing of $350 million long-term line of credit agreement, Dubai, 4 December 2023.

The Africa Finance Corporation (AFC) and the African Development Bank (AfDB) recently announced a significant partnership, marking a pivotal moment in Africa's infrastructural and economic advancement. This collaboration involves a substantial $350 million long-term line of credit from the AfDB to the AFC. Signed on December 5, 2023, during the 28th Conference of the Parties (COP 28) in Dubai, this agreement aims to bolster urgently needed financing for various infrastructure projects across Africa.

This strategic alliance is not just a financial transaction; it represents a deeper commitment to fostering sustainable development and economic growth within the continent. The partnership between these two institutions is longstanding, with the AfDB becoming a shareholder in AFC in 2019. Their joint efforts have led to co-investing in multiple transformative infrastructure projects in Africa. A notable recent collaboration is their involvement in the development of the Lobito Corridor expansion, where AFC was appointed as the lead project developer, alongside the US, EU, and governments of Angola, the Democratic Republic of Congo, and Zambia.

The injection of funds through this line of credit will empower AFC to mobilize additional resources for the continued development of infrastructure projects in key sectors such as power, transportation, telecommunications, and natural resources. These sectors are crucial for bridging Africa's infrastructure gap and creating new pathways for economic growth and prosperity.

AFC's role in this endeavor is significant. Established in 2007, AFC has been a catalyst for private sector-led infrastructure investment across Africa. Their approach blends specialist industry expertise with financial and technical advisory, project structuring, project development, and risk capital. This holistic strategy addresses Africa's infrastructure needs and drives sustainable economic growth. Over the past sixteen years, AFC has emerged as a preferred partner in Africa for investing and delivering high-quality infrastructure assets essential for power, natural resources, heavy industry, transport, and telecommunications sectors. With 42 member countries, AFC has invested over US$12.7 billion across the continent.

This agreement highlights the power of collaboration between leading African multilateral institutions. By combining their resources and expertise, these institutions aim to drive rapid industrialization, generate employment opportunities crucial for Africa's young population, and enhance the value of Africa's raw materials. This, in turn, catalyzes overall economic expansion, steering the continent toward a more prosperous, resilient, and sustainable future.

For more detailed information about this significant development, you can visit the original articles on the African Development Bank Group website and the Africa Finance Corporation website.

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