Africa Finance Corporation (AFC) is partnering with the International Islamic Trade Finance Corporation (ITFC) to provide a $250 million sharia-compliant trade loan facility to Egypt, AFC said in a statement on Tuesday. The Lagos-based development financier said the proceeds from the loan will help Egypt address its immediate priorities and boost economic resilience by financing the purchase of critical petroleum products and agricultural commodities, essential for Egypt's economic infrastructure. "The one-year trade loan facility will be evenly split between two key state-owned entities in Egypt: the Egyptian General Petroleum Corporation (EGPC), in support of the procurement of fuel and petroleum products, and the General Authority for Supply Commodities (GASC), in support of improving food and economic security through essential agro-based commodity imports, such as wheat, corn, vegetable oils and sugar." the statement read. "By combining expertise and resources, this current initiative is set to make a lasting impact on Egypt's economic landscape, reinforcing its resilience and setting the stage for continued progress," the statement read. AFC said the trade loan facility, meticulously structured in accordance with sharia principles, represents a dynamic response to the evolving economic landscape in Africa. "This underscores AFC's commitment to collaborate with powerful partners such as the ITFC to deliver the financial innovation required to transform the African continent by driving local manufacturing, domestic value-addition of primary commodities and local job creation." Samaila Zubairu, president and CEO of AFC, said. "As such, we are delighted to deliver this landmark transaction for Egypt, a member country and shareholder of AFC, and we look forward to continuing partnership as we support the Republic's Vision 2030 national agenda," he added. Meanwhile, Hani Salem Sonbol, CEO of ITFC, emphasised the importance of the partnership. "The Islamic Trade Finance Corporation is pleased to facilitate this financing for Egypt, reaffirming our commitment to supporting the economic growth and stability of our member countries." "Our collaboration with AFC, an institution of such high repute, on this historic transaction, signifies the strength and power of multilateral financial institutions coming together to address Africa's economic challenges." Sonbol added. Earlier, AFC and ITFC had a successful joint track record in Islamic finance, providing in November 2022 a $50 million loan facility to Egypt and a €25 million loan facility to Senegal. Moreover, AFC had recently supported the JPY 75 billion five-year Samurai bond issued by the Egyptian government as a re-guarantor.
