The Africa Finance Corporation (AFC), a prominent infrastructure solutions provider dedicated to driving sustainable development across the African continent, has achieved a significant milestone by securing an AAA domestic credit rating with a stable outlook from China Chengxin International Credit Rating Co. Ltd. (CCXI). This prestigious rating, the highest possible, underscores AFC’s robust financial standing, effective risk management framework, and strategic positioning within the African development finance landscape. The AAA rating serves as a testament to AFC’s unwavering commitment to fostering economic growth and prosperity across Africa through strategic investments in critical infrastructure projects.
The attainment of the AAA rating from CCXI marks a pivotal moment in AFC’s capital-raising strategy, opening doors to China’s vast domestic debt capital markets and providing access to a new pool of investors. This diversification of funding sources will further empower AFC to accelerate its mission of industrialization and infrastructure development across Africa. By tapping into the Chinese market, AFC can leverage the significant financial resources available to support its ambitious project pipeline and contribute to transformative change across the continent. This enhanced access to capital will be instrumental in bridging the infrastructure gap and unlocking Africa’s vast economic potential.
CCXI’s comprehensive assessment of AFC highlights several key strengths contributing to the AAA rating. Analysts lauded AFC’s clear strategic vision and its consistent ability to achieve established goals. The Corporation’s implementation of a sound risk management framework, coupled with a prudent risk appetite, ensures the long-term sustainability of its investments. Furthermore, AFC’s insured loan portfolio effectively mitigates credit risks associated with its projects, providing an additional layer of security for investors. These factors collectively contribute to AFC’s strong credit profile and reinforce its position as a leading multilateral development bank in Africa.
The AAA rating from CCXI not only validates AFC’s financial strength and governance but also strengthens its ties with Asian markets. This enhanced connection will facilitate increased investment in critical sectors driving economic development, job creation, and overall prosperity in Africa. Specifically, AFC plans to explore its first panda bond issuance in the near term, leveraging its newly acquired AAA rating to engage with Chinese bond investors. This strategic move will further diversify AFC’s funding base and deepen its engagement with the Chinese financial market, fostering stronger partnerships and promoting mutually beneficial collaborations.
AFC’s impressive financial performance in recent years further underscores the Corporation’s robust financial health and effective management. In 2023, AFC recorded a 15.3% increase in profits, reaching $329.7 million, and a 17.3% rise in total assets, surpassing its strategic target of $10 billion and reaching $12.3 billion. CCXI analysts noted AFC’s consistent growth trajectory over the 2019-2023 period, with average return on capital increasing from approximately 7% to 12% and a substantial expansion of total assets. This consistent growth demonstrates AFC’s ability to effectively deploy capital and generate strong returns, reinforcing investor confidence and further strengthening its financial position.
AFC’s strategic investments have significantly contributed to the development of key sectors across Africa, including energy, mining, transportation, and industry. Notable projects such as the Dangote Refinery in Nigeria, ARISE Integrated Industrial Platforms, and Infinity Energy, Africa’s leading renewable energy platform, exemplify AFC’s commitment to driving industrialization, fostering economic diversification, and promoting sustainable development. These impactful projects demonstrate AFC’s catalytic role in shaping Africa’s economic landscape and advancing crucial initiatives such as climate action and energy transition. AFC’s strong partnerships with Asian financial institutions, including a landmark $1.16 billion syndicated loan secured with the support of Bank of China and Industrial and Commercial Bank of China, further solidify its position as a key player in facilitating investment and development across the African continent.
