Africa is not one single risk story. Every country, sector and project faces different challenges. Some risks can be addressed through better policies or stronger project structures. Others can be managed through guarantees, insurance or risk-sharing.
When the institutions responsible for development finance gather in Bangkok for the IMF-World Bank Annual Meetings this October, they will bring together much of what is needed to make African projects investable: sovereign analysis, project preparation expertise, lending capacity, guarantees, insurance and access to private investors. The challenge is to deploy those capabilities together, around viable transactions, with a clear allocation of responsibility for the risks that prevent financing.
For Africa, that should be a central question at these meetings. How can the institutions assembled strengthen the shared understanding and cooperation needed to assess, allocate and mitigate African investment risk?
At ATIDI, we have argued that Africa’s investment future depends on understanding risk differently, and that investor confidence must be built at scale. Bangkok offers an opportunity to advance that argument. Confidence becomes investable when it is supported by credible evidence, enforceable contracts and institutions willing and able to absorb defined exposures. Building those conditions requires cooperation between multilaterals, African governments, development insurers and private financiers.
Treating all African economies as a single risk proposition obscures the differences that determine whether an investment can service its debt and deliver a return. Country institutions, fiscal capacity, foreign-exchange availability, sector regulation and contractual enforcement vary materially. Within each country, the same economic shock can affect projects very differently.
Addressable credit and political risks
Consider an exporter earning hard currency and a power producer collecting local-currency revenues while servicing foreign-currency debt. Depreciation affects their cash flows through different channels. For the power producer, tariff adjustment, the availability of hedging and the timing of payments from the utility may determine whether debt remains serviceable. A broad country assessment provides context; project analysis must establish how those conditions translate into repayment risk.
This precision matters economically. A risk premium unsupported by the transaction’s fundamentals raises financing costs. Short tenors accelerate debt repayment. Excessive cash collateral requirements tie up resources that could support construction or operations. Together, these conditions can weaken the financial resilience of the very projects investors want to protect.
As a Chief Risk Officer, I regard the recognition of genuine risk as essential to mobilising capital sustainably. Insurance cannot make an uneconomic project viable. A guarantee cannot resolve an unsustainable debt burden. The task is to distinguish weaknesses requiring reforms or restructuring from exposures that can be allocated and managed through a credible financing structure.
Multilateral knowledge sharing and trust
That distinction should shape how development institutions work together. The IMF’s macroeconomic and debt-sustainability analysis, the World Bank Group’s policy and project capabilities, regional development banks’ financing expertise and development insurers’ underwriting capacity can inform different parts of the same investment decision. African-led organisations such as ATIDI bring knowledge of counterparties, payment behaviour and the practical operation of local markets. Private lenders bring funding requirements and a view of the conditions under which they can commit capital.
These perspectives should meet early enough to influence project design. If risk mitigation enters only after procurement, revenue arrangements and financing terms have been settled, the opportunity to address fundamental weaknesses may already have narrowed.
ATIDI’s experience demonstrates the value of combining institutional capabilities. Our 2025 Annual Report records gross insured exposure of USD9.2 billion, compared with USD8.9 billion in 2024. Approximately 82% was classified as political risk insurance, including sovereign non-payment and contract-frustration perils. The composition underlines how central government-related obligations and actions are to the transactions we support.
In Côte d’Ivoire, a EUR570 million, 15-year, dual-tranche, multi-currency sovereign facility supporting eligible environmental and social expenditure combined an African Development Bank partial risk guarantee with ATIDI’s second-loss protection. This illustrates how institutions can take complementary positions within one financing structure. Such cooperation depends on clarity about where each institution’s exposure begins, the conditions for payment and the residual risk retained by financiers.
In Burundi, cooperation helped bring the Songa Energy hydropower projects to financial close in February 2025. The USD35 million long-term debt facility provided by TDB Group supports two projects with a combined capacity of 10.65 MW, backed by ATIDI’s political risk insurance and payment guarantees through our Regional Liquidity Support Facility (RLSF).
The combination brings political risk protection and support against delayed off-taker payments into the financing structure. Alongside private equity and development-bank lending, these instruments helped establish a financeable structure in a market with limited precedent for transactions of this kind. This experience demonstrates the value of cooperation between African institutions, international investors and development partners in making complex projects financeable.
Investment in Africa’s renewable future
These renewable energy projects also illustrate why payment timing matters. A plant may produce electricity as contracted yet experience a cash shortfall because its utility off-taker pays late. Lenders must assess both the likelihood of eventual payment and whether the project can meet debt service while waiting. Those are distinct questions requiring appropriately matched protection.
ATIDI’s RLSF addresses short-term payment risk for Independent Power Producers (IPPs). Our 2025 report records support for over 116 MW of new renewable generation capacity and more than USD170 million in project financing mobilised. The wider lesson is that a specific obstacle to financing can be addressed through a mechanism designed around the project’s cash-flow needs.
The significance of these experiences extends beyond individual transactions. They demonstrate how a more precise understanding of risk, supported by institutions with complementary expertise, can create the conditions for investment. That should inform the discussions in Bangkok: how can the development finance community bring its collective knowledge and risk-bearing capacity to bear more effectively on Africa’s financing challenges?
A stronger connection between international financial analysis and African market knowledge is essential. Country-level indicators provide necessary context, while local experience helps explain how policy, contractual obligations and payment behaviour affect an investment in practice. Bringing these perspectives together allows investors to distinguish between risks that threaten a project’s underlying viability and those that can be managed through appropriate protection.
The credibility of that protection matters equally. Investors need confidence in the institutions standing behind a transaction, the obligations they have undertaken and their capacity to respond when difficulties arise. Cooperation between multilaterals, development insurers and private financiers can strengthen that confidence by making the allocation of risk clearer and the financing structure more resilient.
The value of cooperation
For African economies, the value of this cooperation lies in the financing conditions it can make possible: longer investment horizons, more sustainable borrowing costs and greater access to capital for viable projects. Accurately assessing and mitigating risk is therefore central to the development outcomes these institutions seek to support.
Bangkok offers an opportunity to strengthen a shared understanding of how those outcomes can be achieved. ATIDI’s experience points to the importance of combining African expertise, disciplined underwriting and international risk-sharing capacity. The challenge for the institutions gathering there is to ensure that investment decisions reflect both the risks a project faces and the protection available to manage them.
Closing Africa’s financing gap requires capital to respond to that fuller assessment. Where risks are demonstrably mitigated, financing decisions should recognise the difference. That is how a better understanding of African investment risk can translate into greater confidence, stronger projects and sustained investment.
About the Author
Dr. Anthony Ehimare is Chief Risk Officer at ATIDI, bringing over 20 years of risk management and institutional banking experience across Africa and North America. Previously, he served as Director/Chief Risk Officer at EBID and held senior risk leadership positions at HSBC Bank USA. He holds a Doctorate in Business Administration and an Executive MBA from the University at Buffalo, New York.
