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Lagos-based financier lines up investments for Kenyan energy, banking sectors

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Lagos-based financier lines up investments for Kenyan energy, banking sectors

Thursday June 02 2022

The new Kenyan bank notes. AFP PHOTO

Lagos-based Africa Finance Corporation (AFC) is lining up potential investments in Kenyan banking and energy sectors, it said this week.

The AFC — which started as part of a growing phenomenon of Africans investing in the continent — did not reveal the identity of the Kenyan firms it is negotiating with but said it is looking to conclude the potential deals soon.

“AFC is reviewing a number of projects that are at various stages of its robust investment approval processes, including potential investments in an e-commerce player and expansion of existing LPG/LNG storage facilities,” the AFC told the Business Daily.

“Under its $2 billion (Sh232 billion) African Economic Resilience Facility, AFC is reviewing its credit allocations for Kenyan banks to provide dollar liquidity to support the short and medium-term trade finance requirements of their clients and payment risk cover (Letter of Credit confirmations, guarantees, among others) to raise trade finance capacity.”

Created in 2007 to help increase much-needed investments in the key infrastructure, transport and heavy industries sectors in Africa, AFC — which is partly owned by African states — has in the past invested in projects worth a total of $8.5 billion (Sh986 billion) including in Kenya’s public and private sectors.

It has, in the past few years, sought to become a significant player in Kenya’s economy, having financed big-ticket deals, including backing a Sh116 billion State capital raise for a roads programme in 2019.

The AFC said it is also assessing investment opportunities in the wider East African region, as it moves to tap emerging opportunities across several economies.

"AFC is reviewing a number of projects in its core sectors across East Africa including an Independent Wind Power Plant in Djibouti, a potash mine in Eritrea, petroleum transport and storage facility in Uganda, oil and gas pipeline, tank farms, storage terminals and jetties," it said.

Local investment banker Dyer & Blair Investment Bank, Kenya holds a 0.009 percent stake in the financier while the Central Bank of Nigeria holds a 41.8 percent stake, according to AFC's filings.

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