…AFC expands funding portfolio with Islamic finance
Africa Finance Corporation (AFC) has secured a US$400 million Shariah-compliant Commodity Murabaha facility, marking its return to the Islamic finance market after eight years. This move aligns with AFC’s strategy to diversify funding sources and expand ethical financing options to support Africa’s infrastructure needs.
Originally launched at US$300 million, strong investor demand led to an increase to US$400 million, with the transaction oversubscribed by 47%. Eleven Islamic financial institutions participated, including new partnerships with Abu Dhabi Islamic Bank PJSC, Al Rajhi Bank, and Emirates Islamic Bank.
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Global investors show confidence in AFC’s strategy
Samaila Zubairu, President and CEO of AFC, highlighted the significance of the transaction. “This transaction reaffirms AFC’s role as a bridge between global capital and Africa’s most urgent infrastructure needs,” he said. “The overwhelming demand demonstrates strong confidence in our investment strategy and Africa’s increasing importance in the Islamic finance landscape. By expanding our international funding sources, we continue to create innovative financial solutions to drive impactful and sustainable development across the continent.”
Emirates NBD Capital Limited, First Abu Dhabi Bank PJSC, and SMBC Bank International Plc acted as Joint Lead Arrangers and Bookrunners, strengthening AFC’s relationships with global financial institutions.
AFC’s track record in Islamic finance
The new financing facility builds on AFC’s experience in Islamic finance. In 2017, the corporation issued a US$230 million Sukuk, the first of its kind by an African supranational entity. In January 2025, AFC raised US$500 million through its first perpetual hybrid bond. The corporation also secured high credit ratings from S&P Global (China) Ratings and China Chengxin International Credit Rating Co. Ltd (CCXI) in anticipation of a potential panda bond issue.
The Murabaha facility complies with the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards, ensuring adherence to global Islamic finance principles.
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Islamic finance and infrastructure development
Islamic finance structures, such as Murabaha, promote asset-backed financing, risk-sharing, and the avoidance of speculative practices. These principles align with AFC’s mission to foster responsible investment and long-term infrastructure development in Africa.
Banji Fehintola, Executive Board Member and Head of Financial Services at AFC, emphasised the importance of Islamic finance in AFC’s strategy. “Islamic finance plays a growing role in our funding strategy, helping us tap into a diverse pool of investors who share AFC’s commitment to sustainable and responsible investing,” he said. “The success of this Murabaha facility highlights the strong appetite for African infrastructure investments and underscores AFC’s ability to structure transactions that meet global investor expectations.”
Supporting industrialisation and renewable energy
The three-year Murabaha facility will finance AFC’s efforts to accelerate industrialisation, infrastructure development, and economic growth in Africa. AFC has several infrastructure projects in the Middle East and North Africa region, including Xlinks in Morocco, which aims to supply sustainable electricity from the Sahara to the UK.
AFC is also a leading investor in clean energy. Through its acquisition of Lekela Power with its partner, Cairo-based Infinity Power, the corporation is targeting 3GW of renewable capacity by 2026.
