Africa Finance Corporation has established AFC Captive Insurance Company, a new subsidiary designed to strengthen risk management and support the expansion of infrastructure financing across Africa. The initiative comes as the continent seeks to mobilize much larger volumes of capital for strategic infrastructure.

Roads, energy, ports, railways, water systems and telecommunications require massive investment, while public-sector resources remain limited. The new risk-management mechanism is expected to strengthen AFC’s ability to support complex, long-term infrastructure projects. The issue is particularly important for African economies seeking to attract institutional investors and international private capital.

Reducing risk to attract international capital

The central problem facing many African projects is not simply a shortage of capital. It is also the perception of risk. An international investor may be willing to finance a profitable infrastructure project but require additional protection against political, regulatory, currency or construction risks.

Insurance and guarantee mechanisms are therefore becoming essential instruments for attracting private capital. This is particularly important for cross-border projects serving several countries. The creation of AFC Captive reflects a broader trend: building an African financial architecture capable of better absorbing risks while mobilizing international investment.