Development Finance Leaders Call for Greater Private Sector Mobilization in African Infrastructure Projects

Yuichiro Akita, President of the Berne Union, praised the Africa Investment Forum for successfully generating $180 billion in investment interest for Africa since its inception in 2018.

At the Africa Investment Forum (AIF) 2024, leaders from development finance institutions (DFIs), insurance companies, and export credit agencies (ECAs) called for enhanced collaboration between the private and public sectors to drive infrastructure financing in Africa. The high-level roundtable, moderated by Simon Bessant, Texel Group's Global Head of Insurance, was centred on the theme: "Scaling up infrastructure financing through partnerships between DFIs, insurers, and export credit agencies."

Yuichiro Akita, President of the Berne Union, praised the Africa Investment Forum for successfully generating $180 billion in investment interest for Africa since its inception in 2018. However, he underscored the growing need to address geopolitical risks and uncertainties in international trade, emphasizing the crucial role of insurers in mitigating risks in key sectors such as energy, social infrastructure, and innovation. “The heavy investments required to achieve Africa's development goals demand that we strongly mobilize private capital,” Akita said.

Leveraging Collaboration to Attract Investment

Manuel Moses, CEO of African Trade & Investment Development Insurance (ATIDI), highlighted the importance of collaboration between governments, banks, and insurers to attract private capital. Moses outlined how ATIDI’s Regional Liquidity Support Facility insures investors against government defaults on infrastructure projects, with successful deployments in countries like Burundi and Malawi to finance solar energy initiatives. Moses expressed plans to expand the facility across Africa, currently covering 24 countries.

Admassu Tadesse, Group President of Trade and Development Bank (TDB), highlighted the success of untied business models in financing projects in frontier markets. He shared that nearly one-third of TDB’s trade finance portfolio is supported by credit insurance, a model that has proven effective in attracting investment.

Innovative Financing Solutions for Africa

Michal Ron, Chief International Officer of SACE, revealed a significant increase in African exposure, with the institution's investment growing from €2.2 billion in 2014 to €15 billion in 2024. This growth is largely attributed to SACE’s innovative "Push Strategy" for untied financing, a model designed to better suit Africa’s dynamic market. Ron also noted SACE’s commitment to green financing initiatives and announced €1 billion in new commitments across four African countries by year-end.

Heike Harmgart, EBRD’s Managing Director for Sub-Saharan Africa, used a medical metaphor to explain how successful green financing initiatives, such as municipal bonds and sustainability-linked instruments, can contribute to long-term investment health. "Innovative and flexible insurance products are crucial to ensure that investors remain confident and that their ‘patient’ stays healthy," she emphasized.

Early Engagement and Risk Mitigation

Haytham El Maayergi, Executive Vice President of the African Export-Import Bank (Afreximbank), stressed the importance of early engagement in the project lifecycle. He advised potential investors to consult DFIs, ECAs, and insurers from the outset to identify risks and create structured solutions that would save time, reduce costs, and ensure smooth implementation. “By addressing potential risks upstream, project developers can pave the way for successful and cost-effective project execution,” he noted.

Lila Granda, Head of Political Risk and Credit at Vantage, highlighted the “pull effect” of working with financing players in Africa. She noted that Vantage Risk had seen positive results in infrastructure projects by leveraging the expertise of insurers who have strong market experience, formal relationships with governments, and a commitment to overcoming challenges.

The Path Forward: Innovative Financing and Public-Private Partnerships

As institutional investors become more involved and local capital markets develop, panelists agreed that innovative financing structures and public-private partnerships would be critical to unlocking Africa’s infrastructure potential. Collaboration between DFIs, insurers, ECAs, and other stakeholders is poised to create sustainable financing models that address the continent's urgent infrastructure needs while fostering inclusive economic growth.

This discussion at AIF 2024 reflected a growing consensus that scaling up infrastructure investment through strategic partnerships will be key to driving long-term development and economic resilience across Africa.