Africa Finance Corporation (AFC) has received a US$50 million 15 year line of financing, with a 13 year six month repayment period, from the Islamic Development Bank (IDB).
The funds will be used to finance projects located across the numerous African IDB member countries. The projects will be structured in a way that is compliant with Islamic Finance, focusing particularly on infrastructural and agricultural projects that promote the economic and social development of the communities concerned.
This is AFC’s first Islamic finance borrowing and is the result of several years of increasing cooperation and collaboration between the two institutions. AFC initiated discussions in 2009 and a Memorandum of Understanding was later signed with the Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the IDB Group.
Andrew Alli, President and Chief Executive Officer of AFC, commented on the announcement: “As AFC’s first Islamic Finance loan, this agreement represents an important step for the corporation. The Islamic finance sector is responding to high demand and rapidly expanding, with a large number of Islamic finance institutions establishing operations here as a result of Africa’s significant Muslim population. There is enormous growth potential within this industry.”