AFC Secures $400m Shariah-Compliant Murabaha Facility

Africa Finance Corporation (AFC) has successfully secured a US$400 million Shariah-compliant Commodity Murabaha facility, marking its return to the Islamic finance market after eight years. Initially launched at US$300 million, the facility was upsized to US$400 million due to strong investor demand, achieving 47 percent oversubscription.

The transaction attracted 11 leading Islamic financial institutions, including first-time collaborations with Abu Dhabi Islamic Bank PJSC, Al Rajhi Bank, and Emirates Islamic Bank. This milestone underscores AFC’s ability to mobilise global capital for Africa’s pressing infrastructure needs.

Emirates NBD Capital Limited, First Abu Dhabi Bank PJSC, and SMBC Bank International Plc acted as Joint Lead Arrangers and Bookrunners, reinforcing AFC’s growing partnerships with international financial powerhouses.

AFC President & CEO, Mr. Samaila Zubairu, speaking in a interview, emphasised the significance of the transaction in expanding AFC’s investor base.

“This transaction reaffirms AFC’s role as a bridge between global capital and Africa’s most urgent infrastructure needs. The overwhelming demand demonstrates strong confidence in our investment strategy and Africa’s increasing importance in the Islamic finance landscape.”

Mr. Zubairu also highlighted how AFC’s diverse funding strategy enables the Corporation to deliver innovative financial solutions that drive impactful, sustainable development across the continent.

This latest transaction builds upon AFC’s previous milestones in Islamic finance, including its US$230 million Sukuk issued in 2017, which was the first-ever by an African supranational entity.

In January 2025, AFC further strengthened its financial position by raising US$500 million through its first perpetual hybrid bond. The corporation also received top-tier credit ratings from S&P Global (China) Ratings and China Chengxin International Credit Rating Co. Ltd (CCXI) in preparation for a potential panda bond issuance, cementing its reputation in global capital markets.

The Murabaha facility was structured in compliance with the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), ensuring adherence to global Islamic finance principles.

Islamic finance structures, such as Murabaha, emphasise ethical, asset-backed financing, risk-sharing, and the prohibition of speculative practices. These principles align with AFC’s commitment to fostering responsible investment and sustainable economic development.

Mr. Banji Fehintola, Executive Board Member and Head of Financial Services at AFC, reaffirmed the Corporation’s commitment to Islamic finance as a key part of its long-term funding strategy.

“Islamic finance plays a growing role in our funding strategy, helping us tap into a diverse pool of investors who share AFC’s commitment to sustainable and responsible investing. The success of this Murabaha facility highlights the strong appetite for African infrastructure investments and underscores AFC’s ability to structure transactions that meet global investor expectations.”

With this latest financing milestone, AFC strengthens its position as Africa’s premier infrastructure finance institution, leveraging diversified funding sources to drive sustainable economic growth and development across the continent.