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Rwanda, Uganda become first to join AFC

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In from Success Allantee . . .

Rwanda and Uganda have become the first East African countries to become members of Africa Finance Corporation (AFC), bringing the development finance institution’s members to 13 African countries. Other members are: Cape Verde; Chad; Côte d’Ivoire; Gabon; the Gambia; Ghana; Guinea-Bissau; Guinea; Liberia; Nigeria and Sierra-Leone.

Chief executive officer, Africa Finance Corporation (AFC), Andrew Alli, said the accession of Rwanda and Uganda marked a significant milestone in AFC’s mission to address Africa’s pressing infrastructure needs and build the foundations for robust economic development across the continent.

He noted that the Corporation has invested $2.6 billion in projects across 24 African countries and in a wide range of sectors including power, telecommunications, transport and logistics, natural resources and heavy industries.

He pointed out that lack of essential infrastructure remains a critical constraint across Africa where for example, over 620 million people do not have access to reliable electricity, adding that AFC will continue to work closely with both public and private institutions to develop innovative financing solutions for large scale infrastructure projects in Africa and oversee the whole project cycle, from concept to completion.

Uganda and Rwanda are forecast to maintain positive growth rates over the coming years, with the International Monetary Fund (IMF) predicting 5.6% and 7% GDP growth in 2015 respectively. Rwanda’s pivotal geographical location at the intersection between East and South has made it a commercial centre bridging the two regions.

Improving the quality of infrastructure is a priority for the governments of these countries. The government of Uganda, for example, plans to implement an $11 billion programme over the next 10 years utilizing both the public and private sector, to upgrade the country’s power and transport infrastructure in particular.

Hon. Matia Kasaija, the Minister of Finance, Planning and Economic Development of Uganda, stated that Uganda was pleased to be one of the first East African Countries to become Members of African Finance Corporation (AFC).

According to him, AFC is bringing innovation to the development and financing of infrastructure on the continent.
He added that Uganda’s partnership with AFC will go a long way in helping the government to attain the Uganda’s Vision 2040 Strategy of “a transformed ugandan society from a peasant to a modern and prosperous country within 30 years.”

Rwandan Minister of Finance and Economic Planning, Mr Claver Gatete, said Rwanda as the first East African member country of the Africa Finance Corporation, stands to benefit from AFC’s well known capability of providing innovative financing solutions to large infrastructure projects on the continent.

AFC, an investment grade multilateral finance institution, was established in 2007 with an equity capital base of
US$1 billion, to be the catalyst for private sector infrastructure investment across Africa.

With a current balance sheet size of approximately US$2.9 billion, AFC is the second highest investment grade rated multilateral financial institution in Africa with an A3/P2 (Stable outlook) rating from Moody’s Investors Service. In May 2015, AFC successfully concluded a debut US$750 million Eurobond issue which was 7 times oversubscribed and attracted investors from Asia, Europe and the USA.

One of AFC’s most significant investments in East Africa is ARM Cement, headquartered in Nairobi, which engineers, builds and operates cement plants. Following their successful listing on the Nairobi Securities Exchange in 2007 the company’s expansion aspirations prompted them to find a financing partner to provide advice and capital to enable future growth. AFC fulfilled this role, investing US$50 million in ARM’s expansion initiatives across Eastern and Southern Africa.

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