By creating its own insurance company, Africa Finance Corporation says it can manage risk more efficiently, stretched her capital further to help unlock funding for projects with direct positive consequences for jobs, businesses and communities.
Africa Finance Corporation (AFC) is strengthening its financial firepower with the establishment of a wholly owned insurance subsidiary in Bermuda. The institution says this leap will help it take on more risk, mobilise more capital and finance infrastructure projects across Africa.
Established in late August 2026, AFC Captive Insurance Company Ltd (AFC Captive) will initially provide insurance cover for loans extended by AFC to its counterparties. The new company has been backed with up to US$30 million in equity capital and has been licensed as a Class 2 insurer.
On paper, the drive is a technical development in financial risk management. On the ground, its significance could be felt in the roads that connect farmers to markets, power projects that bring electricity to businesses, industrial facilities that create jobs and transport systems that make it easier for people and goods to move.
Africa continues to face a large infrastructure financing gap, while governments and businesses often struggle to secure affordable, long-term funding for major projects. Insurance is an important part of that equation because lenders and investors are more willing to commit money, when risks can be properly covered. Turning risk management into more financing capacity.
AFC says the new captive insurer will allow it to retain and manage more of the risks associated with its lending activities, instead of than depending entirely on commercial insurance markets. This drive could give the corporation greater flexibility when structuring transactions and potentially reduce some of the costs and constraints associated with obtaining external insurance.
The flexibility of this new venture can matter more for businesses and project developers seeking financing. A project may be economically viable, but still face difficulty securing funding because of political, commercial, construction or other risks. When those risks can be better managed, financing can become easier to structure.
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