Amid rising urgency for instruments to de-risk investment across Africa, the Africa Co-Guarantee Platform’s (CGP) six partners have affirmed commitments to better leverage guarantee and insurance products, resulting in more trade and investment across Africa.
The partners pledged to extend direct transaction support for specific projects, including infrastructure development and optimizing balance sheets by sharing risk.
They will develop new and hybrid products to address issues such as intra-regional trade, the current food and fertilizer crises, and enhanced coverage for infrastructure investments, public-private partnerships, and fragile/transition states and situations. The CGP will also work with stakeholders to build capacity in the use of risk mitigation instruments that strengthen project preparation and bankability.
The partners are the African Development Bank, African Trade Insurance Agency (ATI), African Union Development Agency (AUDA-NEPAD), GuarantCo (part of PIDG, the Private Infrastructure Development Group), the Islamic Corporation for the Insurance of Investment and Export Credit Insurance (ICIEC), and Afreximbank, which hosted the steering committee meeting.
In his opening remarks, Afreximbank’s Director of Guarantees and Specialized Finance Kofi Asumadu-Addo, highlighted that this is a critical moment and the CGP is needed more than ever.
“The COVID-19 pandemic, the Ukraine crises and the consequent macroeconomic challenges facing the continent, require urgent action on our part as risk mitigation providers. Collectively, we have the capacity among the Platform partners to respond adequately and appropriately to help de-risk and attract investments into and across Africa. We need to bring this to bear in order to reduce the trade and investment financing gap. Afreximbank supports the CGP – but we want to see more concrete results.”Finance Kofi Asumadu-Addo
Need for a transaction-focused platform
Max Ndiaye, Acting Director of Syndications, Co-Financing and Client Solutions at the African Development Bank, stated that the platform was launched in 2018 by President Adesina and the senior leadership of the other partners to help overcome the clear risk mitigation gap in Africa, which stands in the way of closing more trade and investment deals.
Ndiaye noted that the urgency has only become greater since then because “We need a transaction-focused platform that really delivers for our stakeholders”.
ATI’s Chief Underwriting Officer, Benjamin Mugisha, said the platform would leverage each member’s strengths to provide proactive solutions to address Africa’s needs.
“The Co-Guarantee Platform has a unique opportunity to synergize its members’ shared vision and mandate and has committed to proactively do this going forward. The platform will leverage each member’s strengths to providing proactive solutions to address the needs of the continent.”Benjamin Mugisha
Ibrah Wahabou, AUDA-NEPAD’s Head of Infrastructure and Connectivity, said: “The Co-Guarantee Platform is Africa’s bold response by Africa-based DFIs and the African Union Development Agency to deal with the exaggerated, unjustified perception of Africa as a risky place for investors. Together, through the CGP, we are changing the narrative based on concrete deals.”
On his part, GuarantCo Associate Director, Ben Storrs, noted that his outfit looks forward to supporting the development of the Co-Guarantee Platform and institutional partnerships to address Africa’s infrastructure challenges at a greater scale.
Collectively, Storrs said, “we hope to continue building local capacity to enable greater use of innovative credit mitigation solutions to unlock critical infrastructure financing”.
“The Co-Guarantee Platform is a unique opportunity for multilateral partners to work together on scaling up risk mitigation capacity to de-risk investments and trade in Africa. Priorities and concrete steps have been agreed among the partners to take the platform to the next level and ensure a collective and coordinated response to the continent’s needs.”Bessem Soua, ICIEC’s Division Manager for Sub-Saharan Africa and Europe
The Partners also launched the CGP’s web presence to provide information about the platform and its partner institutions.