The Africa Finance Corporation (AFC) has secured a fresh US$100 million loan from the Export-Import Bank of India, strengthening its capacity to fund critical infrastructure projects across the continent at a time when global financing conditions remain increasingly restrictive.
The five-year facility, signed during AFC’s Investor Day in London, provides medium-term liquidity to the Lagos-based financier as African economies grapple with elevated borrowing costs, currency volatility and reduced access to international capital markets.
The deal comes at a pivotal moment.
African countries and institutions are facing tighter global financial conditions driven by higher interest rates and cautious investor sentiment. This has made it more difficult and expensive to raise capital for large-scale infrastructure projects, increasing reliance on development finance institutions such as AFC.
AFC said the funding will support its mandate to develop roads, power systems, industrial facilities, transport networks and digital infrastructure—sectors that remain critical to Africa’s long-term economic transformation.
“This facility is an important milestone in our long-standing partnership with India Exim Bank and reflects our shared commitment to advancing infrastructure development across Africa,” said Banji Fehintola, executive board member and head of financial services at AFC.
The new loan builds on an earlier $100 million facility arranged between both institutions in 2021, signalling a deepening financial relationship between AFC and India.
The significance of the deal becomes clearer when placed against Africa’s infrastructure financing gap.
The African Development Bank estimates that the continent requires between $130 billion and $170 billion annually to meet its infrastructure needs, with a funding shortfall of up to $108 billion each year. This gap has widened in recent years as global borrowing costs surged, making it harder for governments and private sector players to access affordable capital.
As a result, institutions like AFC are playing an increasingly central role.
Founded in 2007, AFC has emerged as one of Africa’s most active infrastructure financiers, backing projects across energy, transport, natural resources, telecommunications and heavy industry. Its portfolio includes investments in power generation, rail networks, ports, gas processing and renewable energy assets.
The latest funding provides AFC with an alternative source of capital beyond traditional Western lenders and bond markets, helping it diversify its financing base and maintain project momentum.
The deal also reflects a broader geopolitical and economic trend: India’s growing engagement with Africa.
Over the past decade, India has steadily expanded its trade and investment footprint across the continent, positioning itself alongside other major players such as China, the European Union, the United States and Gulf economies. Indian firms are already active in sectors including pharmaceuticals, agriculture, manufacturing, mining, energy and technology.
Export credit from India Exim Bank has become a key instrument in this strategy, enabling Indian-backed financing to support infrastructure and industrial development across Africa.
For African economies, this diversification of funding sources is increasingly important.
With global capital markets becoming more selective, access to alternative pools of finance—from India, China and other emerging partners—offers greater flexibility in funding development priorities. It also creates competitive dynamics that can improve financing terms and accelerate project delivery.
However, the stakes are high.
Infrastructure deficits remain one of the biggest constraints on Africa’s economic growth. Inadequate power supply, poor transport networks and limited industrial capacity continue to hinder trade, productivity and regional integration. Without sustained investment, these gaps could slow the continent’s ambitions for industrialisation and economic diversification.
The AFC-India Exim Bank facility is therefore more than just another loan—it is part of a wider race to mobilise capital for Africa’s development.
As global investors weigh risks and returns more carefully, well-structured financing partnerships are becoming essential to unlocking large-scale projects. AFC’s ability to secure funding despite global uncertainty suggests that investor appetite still exists for credible African infrastructure opportunities.
For the continent, the challenge is clear: turning financing into tangible projects that drive growth.
Access to capital is only one piece of the puzzle. Effective execution, strong governance and long-term planning will determine whether these investments translate into improved infrastructure, increased industrial output and sustainable economic development.
In a tightening global financial environment, Africa’s infrastructure future may increasingly depend on such strategic partnerships.
