For nearly four years, infrastructure finance across Africa was recovering from a heavy blow. But in 2025, project finance across the continent is back in the saddle – and as BPL directors Oliver Wright and Sam Evans explain, domestic and international banks are tapping both public agencies and the increased offerings of the private credit and political risk insurance market to grow the opportunity further.
The Covid-19 pandemic, among many things, triggered a hiatus in African project financing. What’s more, recovery post-lockdown was notably latent, particularly relative to the rest of the world.
But in the past 18 months, however, we are pleased to report a resurgence across the region. Activity and enquiries from those looking to insure large-scale developments have firmly returned to pre-Covid levels and many developments that were delayed or suspended are now being revived. It may have taken a little longer to get there, but the opportunities are once again flowing thick and fast.
As a credit and political risk insurance (CPRI) broker with an over 40-year track record in the region, we note three trends in particular that are not just characterising Africa’s project finance rebound, but also represent key inflection points where financial institutions and corporates can partner with the insurance industry to further fuel growth.
This includes the shift towards cleaner energy, which is creating a plethora of renewables and related projects, with evident interest from those looking for cover to leverage the deep experience of the project finance insurance sector. Additionally, the clear trend among domestic African banks is to advance their use of insurance to back and accelerate development-focused infrastructure. Finally, the increasingly complementary offerings of the public and private sectors are both opening new pockets of capacity for further investment and delivering portfolio-level advantages for insureds.
Trend one: Addressing intermittency
Perhaps ironically given historical arguments against it, energy intermittency in various African countries is prompting a pivot to renewable energy and related infrastructure.
For instance, in South Africa, the practice of load shedding (also known as rolling blackouts), has been compounding the urgency for clean energy generation, but also – critically – for renewable captive power and mini-grid projects.
Elsewhere on the continent, we are seeing mines, factories and data centres similarly bypass unreliable national grids across countries such as Madagascar, Rwanda, Mozambique, Nigeria, Ghana, the Democratic Republic of the Congo and Zimbabwe.
On the more nascent end, in Kenya, the burgeoning commercial and industrial sector is igniting demand for captive power project finance. According to ESI Africa, captive power installation numbers in the country have already hit 600MW as at 2025 and are set to rise. Almost half of this total captive capacity is solar (300MW), outstripping Kenya’s total grid solar, which “stagnates” at 210MW.
Though still yet to fully take off, it is worth pointing out that CPRI is already primed to service the related risks, such as complex regulatory hurdles. Indeed, long-tenor, energy-focused developments have long been a staple for the market, with the region a traditional focus too – and the value of this expertise is slowly but surely being gleaned by first movers.
Trend two: Rising inward investment
Tied to this theme of localisation, we note that South African sponsors and financiers also appear to be particularly focused on domestic energy projects due to high margins and urgent local needs. As a result, such institutions are playing a significantly greater role in the infrastructure insurance space than before the pandemic.
Anecdotally, we are increasingly witnessing domestic banks mirroring the approach to CPRI adopted by their counterparts in Europe, the US and Asia Pacific – such as transparency and centralisation through a specialised in-house team that oversees the tool at a portfolio-level. This approach allows such institutions to reap the rewards of CPRI beyond straightforward risk mitigation, such as capital relief under Basel regulations – thus potentially enabling more finance to flow into projects.
But this is not to say that project finance in Africa is not a key focus for international participants too. European and Middle Eastern banks operating in Africa with no/less direct ties to export credit agencies (ECAs) in the region are also harnessing blended or private-only insurance solutions to participate in the opportunities as they multiply.
Trend three: Public/private risk sharing
On a related note, financial institutions and corporates on the continent are no longer defaulting to the public sector alone to hedge their project finance risks.
Of course, financial institutions involved in African project financing continue to rely heavily on ECA and development finance institution (DFI) support. In many cases, in terms of length of tenors, pricing and sovereign-backed guarantees afforded by these institutions, this makes sense – particularly for “first-of-their-kind” deals.
That said, the private insurance market is increasingly looked upon to partake in risk sharing. Private insurers – operating through Lloyd’s and other company markets – are once again building strong infrastructure track records in the region. Both domestic and foreign banks are increasingly prizing private market solutions for their swift execution, flexibility, innovation, ability to tailor risk participation to deal specifics rather than institutional mandates, as well as the leverage of Lloyd’s favourable credit rating (AA-; S&P) and its beneficial impact on risk weighted assets. Clearly, banks that once saw ECAs as the only viable option are now open to diversifying where they look for capacity.
Of course, not every deal is suitable for private insurance, and not every bank is ready to step away from DFI, ECA or Multilateral solutions. But in a world where the volume of African infrastructure deals is growing – and where multilateral capacity is, by nature, limited – creating space for more agile, responsive and knowledgeable participants must be beneficial for all. Indeed, in many cases, private insurers are stepping in not to replace public institutions, but to complement them – co-lending, reinsuring or plugging gaps in risk appetite.
A blended approach
In our work with bank and corporate clients, as well as DFIs and ECAs driving project financing in the region, a clear narrative is unfolding: it is not about choosing between public and private capital or inward or foreign investment – it is a case of blending them.
Such a model allows vital projects to be accelerated and diverse capital streams to be attracted, while helping to ease a project through future geopolitical and regulatory pressures.
At BPL, we have seen an increase of approximately US$1bn across our book of business related to Africa, with notable growth in countries such as Côte d’Ivoire and Kenya over the past year. Given our portfolio represents an estimated 20% of the brokered market, we can both evidence the demand but also infer a growing confidence among lenders to lean on private market structures for a meaningful portion of their African books.
This approach is not quite a revolution, but rather a quiet realignment of how risk is structured, shared, and syndicated in African infrastructure finance. This dynamic, we hope, will help create the ecosystem needed to keep up the richness and momentum of project finance on the continent for the future.
