AFC grows balance sheet 13% to $1.9bn

The Africa Finance Corporation (AFC) saw a 13 percent growth in its balance sheet size in 2013, to $1.9 billion from $1.7 billion, according to data from the bank’s annual report.

The Corporation’s underlying comprehensive income also grew by 5 percent to $87.3 million from $82.3 million for the period.

“This was driven by a significant increase in fees and commission income, combined with improved efficiency translating into lower operating expenses,” said Adebayo Ogunlesi, chairman of the AFC, in a statement to shareholders.

“This is a creditable performance in the context of our transition in balance sheet composition. It also highlights the resilience of our core business as a strong foundation for continued profitability.”

Earnings per share (EPS) increased by 5 percent to $7.35 cents, in the period.

During the course of the year, the Corporation focused on asset creation with a series of structured transactions.

In total, AFC financed $385 million of new investments during the course of the 2013 financial year, with 30 percent of disbursements made external to the host country (Nigeria).

The AFC with a paid up capital of $1.2 billion (N189.6bn), is a supranational financial institution set up in 2007, to acquire, finance and manage infrastructure, industrial and financial assets across Africa, and is majority owned by the Central Bank of Nigeria (42.5%), a consortium of Nigerian banks (47.6%) and several industrial and corporate shareholders (9.8%).

AFC says it will invest over $250 million in the power sector of Ghana, Kenya and Nigeria, while catalysing a further $1 billion in additional investments in sub-Saharan Africa energy projects.

The board of directors recommended a cash dividend of $4 cents per share – $44 million, as payment to all shareholders subject to approval at the 2014 annual general meeting.

The Corporation’s staff strength increased to 73 in 2013, from 66 in 2012.

Nigeria needs at least $20 billion (N3.1trn) a year, or up to $200 billion (N31trn) in the next 10 years to finance its huge infrastructure deficit, according to the Urban Development Bank of Nigeria.

The AFC was set up to help bridge that infrastructure gap by providing early stage risk capital and project structuring capacity, although it has been criticised in the past by analysts for having most of its investments outside of the country.