The African Development Bank (AfDB) will become the largest shareholder in Africa’s leading investment guarantee institution after committing US$125 million to expand its role in de-risking infrastructure and development projects across the continent.
AfDB President Sidi Ould Tah said the investment in the African Trade and Investment Development Insurance (ATIDI) is part of a broader strategy to mobilise private capital and address Africa’s estimated US$400 billion annual development financing gap.
The move will increase AfDB’s shareholding in ATIDI from about 3 percent to 14 percent, positioning it as the institution’s dominant shareholder.
ATIDI, headquartered in Nairobi, provides political risk insurance and guarantees that help reduce investment risk in African markets, thereby encouraging private sector participation in infrastructure, trade and industrial projects.
According to the AfDB, the capital injection is expected to significantly expand ATIDI’s guarantee capacity, with annual coverage targeted to rise to around US$10 billion from roughly $3 billion currently.
The initiative is part of a wider reform agenda dubbed the “New African Financial Architecture for Development” (NAFAD), which seeks to mobilise Africa’s estimated US$4 trillion in domestic institutional capital, including pension funds, sovereign wealth funds and savings schemes.
Tah said the strategy reflects a shift away from reliance on external development assistance, which has declined in recent years amid tightening global aid budgets.
He noted that official development assistance from advanced economies fell by nearly a quarter last year to US$174.3 billion, with the United States accounting for a significant portion of the reduction.
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The AfDB’s plan aims to redirect attention toward financial instruments such as guarantees and risk-sharing mechanisms that can unlock large-scale private investment in infrastructure and development projects.
ATIDI was established over two decades ago to provide insurance against political and commercial risks in order to support investment flows into higher-risk African markets.
Its shareholders currently include 24 African states, development finance institutions and international partners such as Germany’s KfW Development Bank.
AfDB officials said they are encouraging more African governments and financial institutions to take equity stakes in ATIDI to strengthen its capital base and expand its risk-bearing capacity.
Some European partners, including France, are also considering increasing their participation, with discussions expected to continue at upcoming international meetings.
The push comes as Africa seeks to reconfigure its development financing model in response to shrinking external capital flows and growing infrastructure needs.
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Despite progress, analysts note that Africa’s domestic savings rate remains relatively low at around 18%, limiting the availability of local capital for long-term investment.
However, AfDB leadership argues that better coordination of existing resources can significantly increase investment capacity across the continent.
“Africa can mobilise African resources to finance African development,” Tah said, underscoring the bank’s focus on self-reliant financing strategies.
If successful, the expanded role of ATIDI could mark a major shift in how infrastructure and development projects are funded across Africa, with greater emphasis on risk mitigation tools to crowd in private investment at scale.
