Africa Finance Corporation (AFC) is planning to join China's bond market by issuing yuan-denominated panda bonds. This step aims to cut borrowing costs significantly, as Chinese benchmark interest rates are much lower at 1.8%, compared to over 4% in the US. Banji Fehintola, AFC's executive director for financial services, told the South China Morning Post that the corporation began exploring this in 2023 and continues to consider it this year. "Yes, it is on the table for this year. It is one of the things we are considering; we began looking at it last year, and it remains on the table this year as well," he said. Although AFC has not set a fixed timeline, investor roadshows have been completed, and they are ready to act "at short notice" once market conditions are right. The panda bonds would allow AFC to borrow directly in yuan, which Fehintola says is "often more efficient... than going through another currency first." AFC has strong credit backing with AAA ratings from S&P Global (China) Ratings and China Chengxin International, which attract Chinese pension and sovereign wealth funds. This move follows Afreximbank’s 2.2 billion yuan panda bond in 2023 and Egypt's 3.5 billion yuan sovereign issuance that same year. These efforts support Beijing’s goal to internationalize the yuan and reduce reliance on the US dollar by African nations and institutions. Fehintola explained, "Given AFC's deep pipeline of transactions involving Chinese contractors and buyers, the corporation was already discussing settling transactions in yuan." AFC plays a major role in African industrial projects like Arise IIP and the Zambia-Lobito railway, connecting mineral-rich regions to ports. China prefers supporting multilateral institutions like AFC to reduce default risks in Africa. Fehintola said this global trend extends beyond China to regions like the US and the European Union, which also favor lending through well-rated institutions. China Exim Bank has provided $700 million directly to AFC, and AFC has secured over $2.6 billion in syndicated loans this year with leading Chinese banks. By acting as an intermediary, AFC helps channel capital safely into Africa’s development projects while minimizing risks for Beijing.