BRAZZAVILLE, June 1 – The African Development Bank (AfDB) is set to invest $125 million in the African Trade and Investment Development Insurance (ATIDI), a move designed to strengthen the continent’s ability to attract private capital into infrastructure and development projects.
The investment will significantly increase the Bank’s ownership position in ATIDI, elevating it from one of the institution’s smaller shareholders to its largest investor.
The announcement was made by AfDB President Sidi Ould Tah in an interview with Reuters following the Bank’s Annual Meetings in Brazzaville, where financing Africa’s development agenda emerged as a central theme.
The planned capital injection forms part of the AfDB’s broader strategy to reduce dependence on traditional aid flows and accelerate the mobilization of private investment across the continent.
According to Tah, the investment aligns with the Bank’s New African Financial Architecture for Development (NAFAD), an initiative aimed at unlocking domestic and institutional capital to address Africa’s substantial financing needs.
The AfDB estimates that Africa faces an annual development financing shortfall of approximately $400 billion, particularly across infrastructure, energy, industrialization and climate-related projects.
At the same time, African pension funds, sovereign wealth funds, insurance companies and other institutional investors collectively manage an estimated $4 trillion in assets, much of which remains underutilized in development financing.
By strengthening ATIDI’s capital base, the AfDB hopes to expand the use of guarantees and risk-mitigation instruments that can help attract private investors to projects that might otherwise struggle to secure funding.
Tah said the long-term objective is to significantly increase the volume of guarantees issued through ATIDI, creating a stronger platform for financing major infrastructure investments across Africa.
The AfDB expects the partnership to support a substantial increase in project financing capacity, particularly in sectors where perceived investment risks have historically limited private sector participation.
ATIDI has played an important role in supporting investment across Africa through political risk insurance, credit guarantees and trade-related risk mitigation products.
The institution has historically helped facilitate billions of dollars in investments annually by reducing risks for lenders and investors operating in African markets.
Under the proposed transaction, the AfDB’s shareholding in ATIDI is expected to rise from approximately 3% to 14%, making it the agency’s largest shareholder.
The move reflects a broader shift within African development finance institutions toward leveraging guarantees, blended finance structures and private capital mobilization as governments face tighter fiscal conditions and declining external aid flows.
As development financing becomes increasingly constrained globally, policymakers are placing greater emphasis on creating mechanisms capable of crowding in long-term institutional investment to support Africa’s growth ambitions.
The AfDB believes that expanding guarantee-backed financing could become a critical tool in closing infrastructure funding gaps and accelerating economic transformation across the continent.
