This piece is by Benjamin Mugisha, Chief Underwriting Officer, ATIDI
As finance ministers, central bankers and development institutions convene at the IMF–World Bank Annual Meetings in Bangkok this October, Africa’s investment needs deserve a practical conversation. The test is whether the decisions taken there will help more viable projects secure financing in 2027. Credit and political risk insurance should be central to that discussion, with insurers involved early enough to shape how projects are financed.
At the African Trade & Investment Development Insurance (ATIDI), we see how the allocation of risk determines whether investment proceeds. Since our establishment, we have supported more than USD93 billion in trade and investment across Africa. That experience gives us confidence in what risk mitigation can achieve, and a clear view of the work required to extend its reach.
The market enters this next phase with a demanding task. Sovereign debt pressures constrain public balance sheets, while political uncertainty and disruptions to trade can affect both project revenues and the ability of counterparties to pay. Investors have good reasons to examine these exposures closely. But assessments must distinguish between countries, sectors and individual transactions. A broad judgement about Africa tells an underwriter little about a particular borrower’s capacity to honour its obligations.
Focus on early and detailed risk assessment
For 2027, the priority should be to make that detailed assessment possible at an earlier stage. Too often, insurance enters the discussion after contracts and financing structures have largely been settled. By then, a project may contain risks that could have been allocated more effectively during its design. Bringing insurers, lenders and development finance institutions together at the outset creates more room to resolve those weaknesses.
This requires investment in project preparation. Sponsors need credible feasibility studies, transparent ownership and realistic cash-flow forecasts. Lenders and underwriters need to understand the payment obligations, the enforceability of contracts and the arrangements for resolving disputes. Environmental and social requirements must be addressed before they become obstacles to financing. Better preparation makes decisions more reliable and reduces the costly cycle of incomplete submissions and repeated due diligence.
Addressing the challenges without creating more
Insurance also needs to address the right problem. Credit risk insurance protects against specified non-payment risks. Political risk insurance responds to defined government actions or inactions, including certain forms of contract frustration. The scope and conditions matter. Even a well-designed policy cannot make an unsustainable tariff viable or compensate for a project that lacks a credible source of revenue. Bankability still depends on sound underlying economics.
Renewable energy illustrates the value of precision. A power producer may have a long-term power purchase agreement and strong demand for its electricity, yet struggle to attract lenders because the purchasing utility could pay late. Requiring substantial cash collateral can leave scarce funds sitting idle when they could support investment. ATIDI’s Regional Liquidity Support Facility (RLSF), developed with support from KfW and Norad, addresses this specific concern by protecting eligible renewable energy producers against delayed payments from state-owned utilities. Such support can reduce the need to immobilise cash and give lenders greater confidence in the project’s ability to meet its obligations. It must sit alongside a credible assessment of the utility’s longer-term financial position.
Our role as a multilateral insurer also extends to preventing difficulties from escalating. Relationships with member governments and other stakeholders create channels for engagement when payment or contractual problems emerge. Early intervention helps to protect a transaction’s performance. Preserving those relationships, and the treatment of ATIDI’s obligations that underpins market confidence, remains essential as financing volumes grow.
Size does matter/It’s all about scale
The next step is to make these capabilities work together at greater scale. The AfDB’s New African Financial Architecture for Development, NAFAD, provides a framework for coordinating institutions and deploying capital and risk where each can be managed most effectively. For project sponsors, its value should be tangible: clearer routes to support, less duplication, financing arrangements that institutions can use repeatedly and scale to achieve impact that matters.
ATIDI, alongside other development institutions, will support the implementation of NAFAD, ensuring guarantees and insurance bring commercial lenders and long-term investors into larger transactions, with transparent pricing and a shared understanding of the risks retained.
Reinsurance is fundamental to this model. Around 88% of ATIDI’s portfolio is reinsured, connecting African transactions to international risk-bearing capacity. The London specialty
market, including Lloyd’s syndicates, is an important partner within that wider global network. These relationships allow us to share exposures and support business beyond the capacity of our own balance sheet.
The reinsurance backbone
For this partnership to expand, reinsurers need consistent information about transaction structures, portfolio performance and concentration of risk. Brokers and underwriters engage earlier on the terms and duration of protection that projects require. Repeatable structures help make smaller transactions economical to assess, while preserving the scrutiny each exposure deserves. Predictable execution matters as much to a borrower as an indication of available capacity.
Africa’s own institutional investors must also have a larger role. Pension funds and insurers need assets that meet their obligations to savers and policyholders. Suitable credit enhancement help make infrastructure and other productive investments accessible to them, alongside appropriate regulation and better local capital markets. Financing in local currency, where feasible, educes the mismatch between domestic revenues and foreign-currency debt. Insurance must be part of a structure that addresses that mismatch explicitly.
The Bangkok meetings offer an opportunity to identify practical responsibilities for this work. Governments can improve payment discipline and contractual certainty. Development partners can fund preparation and deploy catalytic capital where it enables additional investment. Insurers and reinsurers can help design protection around clearly identified exposures, supported by better data.
The results will speak volumes
In 2027, we should judge progress by the projects reaching financial close, the financing terms they secure and the private capital that participates. As a leading African multilateral insurer, ATIDI has a clear contribution to make. Working with our partners, we help turn more of Africa’s investment pipeline into projects that lenders can finance and insurers can support with confidence.
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