African development group issues first sukuk

Africa Finance Corporation, a development finance body that invests in African infrastructure, has raised $150 million in its first sukuk issuance.

The oversubscribed transaction was increased from its original target of $100 million due to high investor demand. It is the first sukuk to be issued by an African supranational entity, according to the corporation.

“The core values of Islamic finance, the need to invest ethically in assets that have a tangible positive social impact, made a sukuk issuance a natural choice for us,” said Andrew Alli, president and chief executive.

Emirates NBD Capital was the sole global coordinator for the privately placed issuance, sharing bookrunning and lead manager roles with MUFG and RMB.

Established in 2007, the Africa Finance Corporation has invested more than $4 billion in projects in 26 African countries. It raised $750 million in a bond issue in 2015 and 100 million Swiss francs ($100 million) in a bond issue last year.

Sukuk are financial instruments that mimic the structure of bonds without paying interest, which is prohibited in Islam.

©2017 funds global mena

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