AFC Launched her Insurance Company to Expand Infrastructure Financing/Risk Management Across Africa,

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.

AFC Captive will initially focus on AFC’s own portfolio, and will also be able to provide insurance capacity to AFC affiliates and selected third parties. Up to 20% of its underwriting capacity can be allocated to such businesses. Over time, the institution expects the subsidiary to develop broader insurance expertise and create tailored risk-mitigation solutions for infrastructure investments across the continent.

As a financial decision with wider economic implications, AFC’s move comes at the moment that African economies are under pressure to attract significantly more private and institutional capital for infrastructure and industrial development. Most ordinary Africans would feel strongly that infrastructure finance is a balance-sheet issue. They only would experience this kind of transactions through the availability of electricity, the quality of roads, the cost of moving goods, access to reliable transport and the ability of businesses to expand and create jobs.

A new factory financed and insured through a stronger financial structure in a community, can mean job creation for young people in that given African community. A transport project can reduce the cost and time of getting farm produce to market. Reliable power can allow small businesses to operate for longer hours and reduce dependence on expensive alternatives.

Although the impact will not be automatic, and the establishment of AFC insurance company does not in itself guarantee that more projects will be financed. But AFC maintains that stronger internal risk-management capacity can help remove one of the obstacles that often stands between promising projects and the capital required to build them.

Leaning and building on AFC’s financial strength, the new subsidiary also draws reputable strength from AFC’s highly strong standing in international financial markets. AFC holds an A3 long-term issuer rating from Moody’s, while S&P Global assigned the corporation an A long-term and A-1 short-term issuer credit rating, with a Positive Outlook in January 2026.

The latter represents the highest rating AFC has received from a major global ratings agency. The corporation has also secured renewed AAA domestic issuer ratings with stable outlooks from China Chengxin International Credit Rating Co. Ltd. and S&P Global (China) Ratings. AFC hopes that the strength of its parent balance sheet and reputation, will provide a foundation for AFC Captive to develop its own investment-grade credit profile, as it grows.

With regards to Africa’s infrastructure challenge, the broader objective is clear; find more efficient ways to turn available capital into actual projects.

From a political and social dimension, infrastructure has also become gradually central to Africa’s political and development agenda. Governments are under pressure from citizens to deliver visible improvements in living standards; and investors want greater certainty before committing long-term capital. That makes institutions such as AFC important intermediaries between public development priorities and private finance.

The creation of AFC Captive therefore goes beyond the internal affairs of a financial institution. It reflects a bigger push by African development financiers, to build financial structures capable of supporting the continent’s long-term economic ambitions, without relying exclusively on traditional sources of funding.

AFC President/CEO – Samaila Zubairu, said the continent’s infrastructure needs require innovative approaches that can mobilise more capital and expand financing capacity.

Wola Asase, AFC’s Deputy Director and Head of Syndications, who will also oversee AFC Captive, said the subsidiary would provide greater flexibility in structuring transactions and could help unlock financing for projects constrained by limited, or expensive external insurance.

In the longrun, AFC Captive’s assessment will eventually be evaluated by the additional capacity it will help to build, not just in underwriting capacity, ratings or financial returns. Because perceptually, AFC Captive is founded to help make that connection between finance and development stronger.