Afreximbank concludes deals and accelerates funding
The Afreximbank is currently on a capital increase. This is in part to help accelerate funding especially in the area of trade finance with a gap estimated at an average of $91bn between 2011-2019. With international banks becoming more risk-averse in frontier and emerging economies, this is likely to get bigger.
In his opening speech, Prof. Benedict Oramah, President of the Bank, announced that, by 2021, Afreximbank, through its Intra-African Trade Division, had disbursed about $20bn dollars in support of intraAfrican trade and investments, with plans to disburse a further $40bn dollars during the next five years. That had raised the intra-African trade share of the Bank’s portfolio from 3% in 2016 to about 27% in 2021 and had enabled African contractors to bid for African infrastructure-related projects.
During the Annual Meetings in the new administrative capital in Cairo a number of deals were signed, notably a $35m facility to EPC contractor and power developer AEE Power to support the energy company to enhance its operations across Africa.
Rene Awambeng, Global Head, Client Relations, Afreximbank noted that the facility was made possible through the Afreximbank Guarantee Programme (AFGAP) and would be for a period of four years.
The Bank also signed a cooperation agreement with Arise Integrated Industrial Platforms (Arise IIP) through which the Bank will offer financial and non-financial interventions to tenants in Arise Industrial Parks (IPs).
The agreement also enables Afreximbank and Arise IIP to collaborate on the establishment of laboratories for testing, inspection and certification services for goods produced in Arise industrial parks leveraging the African Quality Assurance Centre (AQAC).
AQAC, is one of Afreximbank’s flagship initiatives under its Industrialisation and Export Development Pillar of its current strategic plan. It is intended to facilitate the compliance of African produce with international trade standards through the establishment of Quality Assurance Centres.
A little before the Annual Meetings in June, Afreximbank had announced the disbursement of a $300m IntraAfrican Investment Financing Facility to Titan Trust Bank (TTB) to support its acquisition of a majority stake in Union Bank Plc, Nigeria. TTB is member of the Tropical General Investment (TGI) Group, a pan-African group with diversified investments across seven African countries in various industries and a large network of origination, distribution, and supply chain hubs.
A week earlier, Afreximbank agreed a mandate with the International Islamic Trade Finance Corporation (ITFC) to raise a $250m Murabaha Financing facility, which will support Afreximbank’s Ukraine Crisis Adjustment Trade Financing Programme for Africa (UKAFPA).