The African Development Bank (AfDB) has announced plans to invest $125 million in African Trade and Investment Development Insurance (ATIDI), a move that will significantly increase its ownership stake and make it the institution’s largest shareholder.

The investment is expected to strengthen efforts aimed at attracting private sector financing for infrastructure, trade and development projects across Africa at a time when traditional sources of development funding continue to face increasing pressure.

The development was disclosed by AfDB President Sidi Ould Tah following the bank’s annual meetings held in Brazzaville, Republic of Congo.

According to Tah, the planned investment forms part of a broader strategy to mobilise African capital and expand financing options for development initiatives across the continent.

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The AfDB president explained that the investment will increase the bank’s ownership stake in ATIDI from three per cent to 14 per cent, making the institution the largest shareholder in the multilateral risk insurance agency.

He noted that the decision aligns with the bank’s New African Financial Architecture for Development (NAFAD) initiative, which seeks to unlock and channel domestic African capital toward critical development priorities.

Tah stated that Africa possesses substantial financial resources held within pension funds, sovereign wealth funds, insurance assets and savings institutions. However, much of this capital remains fragmented and underutilised despite the continent’s significant infrastructure and development financing requirements.

According to him, the initiative aims to unlock approximately $4 trillion in African institutional capital that could be mobilised to support economic growth and infrastructure development.

The AfDB president said strengthening ATIDI’s capital base would allow the institution to expand its guarantee and insurance operations, making it easier for private investors to participate in projects that might otherwise be considered too risky.

He explained that the long-term objective is to significantly increase the value of guarantees provided by ATIDI annually, thereby supporting larger volumes of investment across key sectors of African economies.

Tah noted that guarantees have become an increasingly important instrument for attracting private capital, particularly as governments and development institutions seek alternative funding sources to address infrastructure deficits.

The investment comes against the backdrop of declining global development assistance. Available data show that development aid from advanced economies has declined significantly in recent years, increasing pressure on multilateral development institutions to identify innovative financing mechanisms.

The AfDB believes that expanding guarantee programmes and risk mitigation instruments can help bridge financing gaps by improving investor confidence and reducing perceived risks associated with projects in emerging markets.

ATIDI, which is headquartered in Nairobi, Kenya, was established to support trade and investment across Africa by providing political risk insurance, credit insurance and guarantee products.

Over the years, the institution has played a significant role in encouraging investment flows into sectors such as infrastructure, energy, manufacturing, agriculture and financial services.

The agency currently has 24 African member countries alongside a range of institutional shareholders, including development finance institutions and international financial partners.

Tah noted that ATIDI has historically facilitated billions of dollars in investments annually through its insurance and guarantee programmes, helping businesses and investors manage risks associated with operating in various African markets.

The AfDB president also disclosed that discussions are ongoing with several governments, development institutions and investors interested in increasing their participation in ATIDI.

According to him, strengthening the institution’s shareholder base will improve its capacity to support investment activities and expand access to risk mitigation products across the continent.

He added that efforts are underway to encourage additional African countries and financial institutions to acquire stakes in the organisation, further strengthening its capital position and operational reach.

The planned investment represents one of the most significant changes in ATIDI’s ownership structure in recent years and underscores the growing importance of guarantee-based financing solutions in Africa’s development landscape.

Development finance experts have increasingly highlighted the role of guarantees in mobilising private investment, particularly for large-scale infrastructure projects that require substantial capital commitments.

The AfDB believes that enhancing ATIDI’s financial capacity will contribute to increased investor confidence and facilitate greater participation by private sector investors in projects that support economic growth and development.

The investment also reflects the bank’s broader objective of promoting sustainable financing models that leverage domestic resources while reducing reliance on external aid flows.

With the proposed capital injection, ATIDI is expected to strengthen its ability to provide risk mitigation services and support larger volumes of trade and investment activity across Africa, reinforcing efforts to accelerate infrastructure development and economic transformation throughout the continent.