The African Development Bank (AfDB) has approved a $125 million equity investment in African Trade & Investment Development Insurance (ATIDI). The transaction will increase AfDB’s stake in the pan-African insurer from around 3% to nearly 14%, according to information shared about the deal.
This investment comes as development institutions seek to enhance risk-sharing mechanisms to mobilize more private capital towards Africa, where the cost of financing remains high in many countries.
Based in Nairobi, ATIDI provides guarantees against political risks, payment defaults, and various forms of commercial risks that may hinder cross-border investments. Strengthening its capital base should enable it to increase its coverage capacity and support a larger volume of transactions on the continent.
The transaction also supports efforts to accompany the rise of the African Continental Free Trade Area (AfCFTA), which partly depends on better access to guarantee and risk insurance instruments.
For AfDB, this investment marks a strengthening of its strategy to mobilize the private sector, in a context where the continent’s financing needs far exceed the available public resources.
