The African Development Bank (AfDB) has launched a $500m credit insurance deal in partnership with the African Trade Insurance Agency.
Concise News understands that the move would cover some sections of the bank’s portfolio of non-sovereign operations in Africa.
In a statement on Tuesday, the AfDB noted that the development would trigger other organizations to invest more in the continent.
ATI will be the direct insurer facing the AfDB with the transaction involving some Lloyd’s & Company private reinsurers who will share the risk on African financial institutions.
According to the bank, the new move would ensure that insurance firms outside Africa participate in the bankrolling of development in the continent for the first time.
“This transaction leverages the bank’s own capital to achieve more development and lending as it creates new pathways for collaboration between private insurers and the bank in the development of the African continent,” the President of the African Development Bank Group, Akinwumi Adesina, said.
In addition, the AfDB noted that the insurance would cover 22 percent of the bank’s $2.3bn outstanding non-sovereign financial sector portfolio.
It would also shield about 30 African financial firms against the non-payment of loans.