African infrastructure and industrial investment catalysing agency, the African Finance Corporation (AFC), has announced that ratings agency China Chengxin International Credit Rating (CCXI) had awarded it an AAA domestic credit rating, with a stable outlook. AFC focuses on the power, natural resources, heavy industrial, transport and telecommunications sectors.

"Receiving an AAA credit rating from CCXI is another significant endorsement of AFC’s strong credit profile and a defining moment in AFC’s capital-raising strategy,” affirmed AFC president and CEO Samaila Zubairu. “This recognition at the highest level validates our financial resilience, robust governance, and global reach, and will enable stronger ties with Asian markets to drive essential investment in economic development, high-value job creation, and Africa’s prosperity."

The rating by CCXI would allow AFC greater access to the huge Chinese domestic debt capital markets. This would allow the African institution to reach a new source of investors, and further expand its sources of funding, to accelerate African critical infrastructure and industrial development.

“AFC implements a sound risk management framework and maintains a prudent risk appetite. Furthermore, its insured loan portfolio effectively mitigates the credit risk of its projects,” stated the CCXI analysts in their report. “AFC successfully achieved its strategic indicators during the 2019-2023 period. Over the five years, the average return on capital rose from approximately 7% to 12%, while total assets increased substantially, growing from about US$4.5-billion at the end of 2018 to US$12.3-billion at the end of 2023.”

AFC planned to investigate its first “panda bond” issue, in the near future. The CCXI credit rating put the AFC in a place where it could deepen its engagements with Chinese bond investors, throughout this year and afterwards.  

The African institution already had significant collaborations with leading Chinese financial institutions. Last year, for example, the AFC had secured a $1.16-billion syndicated loan, in which the Bank of China and the Industrial and Commercial Bank of China (London branch) had played key roles. In 2023, AFC had secured a five-year loan facility from the Export-Import Bank of China, to finance trade and support private-sector projects.