S&P Global Ratings has assigned long- and short-term credit ratings of “A/A-1” with a positive outlook to Africa Finance Corporation (AFC), citing the pan-African lender’s strong risk management, solid asset quality and growing role in financing infrastructure across the continent.
The ratings, assigned on Jan. 28, reflect what S&P described as AFC’s “strong risk profile” and conservative approach to lending, despite operating in higher-risk markets. AFC, founded in 2007, specialises in financing infrastructure projects in sectors such as power, transport, natural resources and telecommunications.
Since its inception, AFC has mobilised US$18.5 billion in financing across 36 African countries, according to S&P. The rating agency said the institution maintains a low risk appetite, supported by rigorous portfolio monitoring, strict credit approval processes and the use of risk mitigation instruments.
“AFC’s investment strategy focuses on addressing Africa’s infrastructure gaps while supporting national development priorities,” S&P said. While many of its projects are located in countries with elevated political and economic risks, the agency noted that AFC uses credit enhancement tools such as credit default insurance to manage downside exposure.
S&P highlighted the institution’s track record on asset quality, noting that AFC reported no non-performing loans (NPLs) during its first nine years of operations. Despite a more challenging operating environment in recent years, asset quality has remained strong.
As of Dec. 31, 2024, NPLs stood at 1 percent, down from 2.6 percent a year earlier, following the write-off of two of the lender’s three non-performing exposures. Provisions covered 396 percent of NPLs at the end of 2024, providing a significant buffer against potential losses.
The rating agency also pointed to AFC’s solid access to funding markets. Capital market instruments account for about 36 percent of total funding, with the remaining 64 percent sourced from banks and development finance institutions (DFIs). S&P said this diversified funding profile reduces refinancing risks and supports balance-sheet resilience.
Liquidity was also described as strong. AFC’s liquidity reserves are mainly held in highly rated government bonds, mostly with “AA” ratings, as well as cash and term deposits placed with well-rated banks.
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In addition, S&P noted that AFC raises domestic resources by leveraging its public-private partnership (PPP) structure, allowing it to tap into multiple pools of capital across Africa, including pension funds and institutional investors.
However, the agency flagged the institution’s concentrated shareholding structure as a potential weakness. As of the end of 2025, AFC had 60 shareholders, including 23 sovereign entities and state-owned enterprises, 21 financial institutions, seven pension funds and asset managers, three multilateral credit institutions, and six other private institutions.
Despite this diversity, S&P said ownership remains highly concentrated. The Central Bank of Nigeria and Nigerian financial institutions together hold about 75 percent of AFC’s total capital, which the agency described as “one of the highest concentrations among rated multilateral financial institutions”.
“Many other sovereign shareholders have very small token stakes, less than 0.5%, potentially indicating a limited commitment to AFC,” S&P said. It added, however, that no major shareholder has ever withdrawn from the institution, which it viewed as a mitigating factor.
At the end of 2025, AFC had 48 African member states, but only 16 had taken equity stakes. Membership in the institution does not automatically require capital contributions.
S&P said one of AFC’s key strategic priorities is now to encourage more member states to become shareholders in order to expand its capital base and reduce ownership concentration. A broader shareholder base could further strengthen the institution’s credit profile and support future growth, the agency said.
The positive outlook reflects S&P’s view that AFC could benefit from further strengthening of its capitalisation, broader shareholder support and continued prudent risk management, while maintaining low levels of problem loans.
AFC joins a small group of African multilateral and development finance institutions with high investment-grade ratings, at a time when infrastructure financing needs across the continent remain vast.
Analysts say the rating could enhance AFC’s ability to raise funds at competitive rates, supporting its role in mobilising long-term capital for infrastructure projects critical to Africa’s economic growth and regional integration.
