AFC Invests Up to $20M in Dhamana to Unlock Local Currency Funding for East Africa’s Infrastructure Boom

AFC has committed up to $20 million in Dhamana, with an initial $10 million tranche injected into the company’s core capital—providing a strong foundation for scaling its guarantee operations.

In a major push to transform infrastructure financing across East Africa, the Africa Finance Corporation (AFC) has announced an equity investment in Dhamana Guarantee Company Limited, a newly established credit enhancement platform aimed at mobilising long-term, local currency funding for critical projects.

The move signals a growing shift toward domestic capital mobilisation and innovative financing structures, as African economies seek sustainable alternatives to foreign currency borrowing.

Strategic Investment to Catalyse Regional Growth

AFC has committed up to $20 million in Dhamana, with an initial $10 million tranche injected into the company’s core capital—providing a strong foundation for scaling its guarantee operations.

The investment positions Dhamana as a key player in bridging one of Africa’s most persistent development challenges: the mismatch between long-term infrastructure needs and short-term, high-cost financing options.

Unlocking Domestic Capital Markets

Dhamana’s core mandate is to provide credit guarantees that enable infrastructure developers to access funding from:

• Pension funds

• Insurance companies

• Institutional investors

These guarantees reduce risk, allowing projects to secure financing on more favourable terms and in local currency, thereby:

• Lowering exposure to exchange rate volatility

• Extending loan tenors

• Improving project bankability

By linking long-term domestic savings with infrastructure investment, Dhamana aims to deepen East Africa’s capital markets and reduce reliance on external debt.

Building on a Proven Model

The initiative draws on the successful experience of InfraCredit Nigeria, a similar credit enhancement facility in West Africa where AFC is a founding shareholder.

InfraCredit has demonstrated how guarantee platforms can:

• Mobilise billions in local currency financing

• Enhance investor confidence

• Enable large-scale infrastructure delivery

“Dhamana represents a strategic opportunity to replicate this success in East Africa,” said Banji Fehintola, AFC’s Executive Board Member and Head of Financial Services.

Strengthening Investor Confidence and Governance

Dhamana is backed by a consortium of development partners and institutional investors, with AFC expected to play a key role in:

• Strategic oversight

• Governance frameworks

• Risk management

According to Dhamana CEO Christopher Olobo, AFC’s participation is a strong institutional endorsement that will:

• Strengthen the company’s capital base

• Enhance governance standards

• Accelerate scaling of operations

Driving Infrastructure Across Key Sectors

Dhamana’s project pipeline spans multiple sectors critical to East Africa’s development, including:

• Energy

• Transport

• Water and sanitation

• Social infrastructure

The focus is on bankable, high-impact projects that deliver measurable development outcomes while maintaining strong financial discipline.

Advancing Financial Inclusion and Economic Resilience

Beyond infrastructure, the initiative is expected to support broader financial sector development by:

• Expanding access to capital for underserved markets

• Strengthening local financial institutions

• Promoting inclusive economic growth

Credit enhancement mechanisms like Dhamana also help create more resilient financial ecosystems, capable of supporting long-term investments.

A Strategic Shift in African Infrastructure Finance

AFC’s investment aligns with a broader continental trend toward:

• Local currency financing

• Reduced dependence on foreign capital

• Greater use of blended finance and guarantees

Experts note that Africa faces an annual infrastructure financing gap estimated at $100–170 billion, making innovative solutions like Dhamana essential.

Looking Ahead

As Dhamana begins operations, its success could serve as a blueprint for similar facilities across Africa, helping to unlock domestic capital at scale and accelerate infrastructure development.

By combining strong governance, risk mitigation, and strategic partnerships, the platform aims to transform how infrastructure is financed—turning local savings into engines of growth.

“This partnership is about mobilising capital where it already exists and putting it to work where it is needed most,” Fehintola said.