- The Fund is backed by the governments of the United Kingdom, the Netherlands, Switzerland, and Sweden.
- It attributed the performance to a high level of member support from a base of highly-rated shareholders
Image: COURTESY
The Emerging Africa Infrastructure Fund (EAIF) has been assigned a foreign currency long-term issuer rating of A2 with a stable outlook by Moody's.
A2 is the sixth highest rating in Moody's Long-term Corporate Obligation Rating and is considered upper-medium grade, subject to low credit risk.
The rating affirms EAIF’s leading position as an attractive vehicle for investors seeking exposure to the burgeoning African infrastructure asset class.
Martijn Proos, the fund manager of the EAIF said that they are proud to initiate a rating with Moody’s.
"The A2 rating evidences our ability to take on and proactively manage risk to deliver returns and generate sustainable development impact," Proos said.
"We are committed to building our diversified portfolio as we ramp up vital funding for strategic projects that boost Africa’s resilience. This rating will assist us to further diversify the types and sources of funding we can access as we build our business in the years to come.”
The Fund is backed by the governments of the United Kingdom, the Netherlands, Switzerland, and Sweden.
The EAIF was established in 2001 to address the lack of long-term foreign currency debt finance for infrastructure projects in sub-Saharan Africa.
Early this year EAIF provided Kenya with a US$35 million (Sh3.9 billion) loan over a 15-year term to the 40MW Kesses solar generation facility being built in Eldoret.
The financing was directed towards the development of the Kesses solar park project, whose construction is scheduled to be completed by December.
According to the international rating agency, the main factors underpinning the EAIF’s A2 rating include a strong capital position that reflects moderate but rising leverage, and a diversified lending portfolio notwithstanding weak asset credit quality.
Secondly, a robust base of liquid assets stemming from highly-rated development finance institutions and commercial lenders also influenced its performance.
It attributed the performance to a high level of member support from a base of highly-rated shareholders, reflecting EAIF’s strategic position in the broader Private Infrastructure Development Group (PIDG).
EAIF is the leading provider of debt funding to Africa’s alternative energy generation sector and Kenya is the ninth African country where the Fund has supported renewable energy projects in recent years.
The others are Burkina Faso, Cameroon, Côte d’Ivoire, Mali, Mozambique, Rwanda, Tanzania and Uganda.
EAIF mobilises public and private debt capital to deliver transformative infrastructure in sub-Saharan Africa.
Since its establishment, it has closed 90 projects for a total investment of $2.1 billion and mobilised private sector investment commitments of $15.2 billion.
So far the Fund has received $395 million of equity capital from four Governments through the Private Infrastructure Development Group.
Retained earnings are over $100 million and have been recycled back into the Fund.
The Fund’s loss rate has been low, demonstrating the essentiality and commercially conservative financing structures of the projects it funds.
An estimated 151.4 million people across Africa are benefitting from EAIF-funded projects.