The African Development Bank (AFDB) and African Trade Insurance Agency (ATI) have announced the successful completion of a $500 million credit Insurance deal, Structured to cover a portion of the Banks portfolio of non-Sovereign operations in Africa.
This transaction is expected to have an important demonstration effect to encourage similar institutions to invest more on the continent in the future. While ATI will be the direct Insurer facing the African Development Bank, the transaction involves the participation of a number of Lioyds & Company private reinsurers who will share the risk on African Financial Institutions. This vehicle will enable many Insurance companies operating outside Africa to participate in the financing of development in Africa for the first time. The Insurance will cover approximately 22% of the Bank’s & 2.3 billion outstanding non-sovereign financial sector portfolio.
Specifically, it will protect the Bank against the non-payment of loans made to about 30 African Financial Institutions.