(Bloomberg) -- Africa Finance Corp., which focuses on infrastructure across the continent, raised $400 million in a syndicated loan to bolster its balance sheet as the region seeks to recover from the coronavirus pandemic.
The three-year facility, the first by the development-finance institution since 2018, was 2.5 times oversubscribed and was increased from an initial target of $300 million, it said in a statement on Tuesday. While the funds mostly replaced maturing debt, the fund raising attracted new lenders from South Africa, the Middle East and South Korea.
“The continent needs a lot of resources to recover from Covid,” said Banji Fehintola, AFC’s senior director and treasurer. “It’s important to keep diversifying our funding sources.”
The loan, secured from a group of 12 banks, is part of a plan to boost total borrowing this year by a net $2 billion by using a mix of loans, bonds and other instruments. While $2.5 billion to $3 billion will be borrowed in total, some of the money will be used to settle liabilities.
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Absa Group Ltd. of South Africa, Dubai’s Mashreqbank PSC and Korea Development Bank were first-time lenders to AFC, he said. Standard Chartered Plc and Bank of China Ltd. were also among banks that offered money.
This year’s funding could include a Kimchi Bond, a security sold in foreign currency in the South Korean market, as well as so-called sustainable loans, Fehintola said.
The AFC was founded in 2007 and has invested more than $9.8 billion in projects in 35 African countries.
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