The African Development Bank is set to invest $125 million in the African Trade and Investment Development Insurance, a move that will make the continental lender the institution’s largest shareholder while strengthening efforts to attract greater private sector investment into infrastructure and development projects across Africa.

The disclosure was made by AfDB President, Sidi Ould Tah, during an interview with Reuters following the bank’s annual meetings held in Brazzaville last week.

Tah, who assumed office as president of Africa’s largest development finance institution in September 2025, has been promoting a new financing strategy at a time when traditional development assistance is experiencing significant declines.

Available data indicate that development aid from wealthy countries dropped by nearly 25 per cent last year to $174.3 billion. Reductions in funding from major contributors, including United States, have increased pressure on development finance institutions such as the AfDB to identify alternative sources of funding for the continent’s development needs.

According to Tah, the proposed $125 million investment forms part of the bank’s broader New African Financial Architecture for Development (NAFAD) initiative, which is designed to mobilise Africa’s vast domestic financial resources to fund infrastructure and development projects across the continent.

The initiative seeks to unlock an estimated $4 trillion held in African institutional capital pools, including pension funds, sovereign wealth funds, insurance assets and savings schemes. Tah noted that these resources remain largely fragmented despite Africa facing an annual development financing gap estimated at about $400 billion.

He explained that the strengthened partnership with ATIDI would significantly expand the use of guarantees as a mechanism for attracting private capital into infrastructure projects and other strategic sectors.

“Our target is to bring the level of guarantees provided by ATIDI to 10 billion (dollars) annually and reach a target that will really unlock huge potential for financing infrastructure at scale,” said Tah after the bank’s annual meeting in Brazzaville last week.

According to Tah, the planned investment will increase the AfDB’s ownership stake in ATIDI from 3 per cent to 14 per cent, making the bank the institution’s largest shareholder.

He further disclosed that ATIDI has historically facilitated investments averaging about $3 billion annually through its insurance and guarantee products.

Established 25 years ago and headquartered in Nairobi, ATIDI was created to reduce investment risks across Africa through the provision of insurance and guarantee products aimed at encouraging private sector investment in markets often considered high risk.

The institution is currently owned by 24 African countries as well as several institutional investors, including African financial institutions and KfW Development Bank, which joined its shareholder base earlier this year.

The AfDB’s planned investment represents a significant shift in ATIDI’s ownership structure, which has historically been distributed among member countries. Nations such as Togo and Benin are among the institution’s largest shareholders.

Tah stated that the AfDB is encouraging more African governments, development institutions and private investors to acquire stakes in ATIDI in order to strengthen its capital base and expand its capacity to support investment flows across the continent.

He disclosed that discussions are currently underway with several financial institutions and countries interested in either increasing their shareholdings or becoming shareholders for the first time.

According to him, France is also considering increasing its stake in the institution, with further details expected during a G7 meeting scheduled to take place later this month.

Tah stressed that Africa must increasingly depend on domestic capital mobilisation to achieve its long-term development goals, maintaining that African resources can play a far greater role in financing the continent’s economic growth.

The latest investment initiative comes as the AfDB continues to expand its interventions across critical sectors of Africa’s economy.

On May 28, the bank warned that Africa’s trade finance gap could widen to as much as $86.6 billion by 2027 as a result of rising geopolitical tensions in the Middle East, increasing energy costs and tighter global credit conditions.

The AfDB has also intensified support for major infrastructure projects across the continent.

Recently, Nigeria signed a Letter of Intent with the AfDB to advance the $7 billion Integrated Aviation Transformation Programme, a project aimed at modernising the country’s aviation sector and improving operational efficiency.

In addition, the bank approved a $200 million financing facility for the Bank of Industry on May 16 to improve access to long-term funding for businesses operating in critical sectors of the Nigerian economy.

The planned investment in ATIDI aligns with the AfDB’s broader strategy of mobilising private capital, strengthening risk-sharing mechanisms and addressing Africa’s growing infrastructure and development financing gap.