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Development finance institutions in Africa

19.05.2015
By RisCura

Development Finance Institutions (DFIs) are government-funded institutions that make investments in sectors and countries that would not otherwise attract significant capital. DFIs generally aim to have a developmental impact in the markets in which they invest, alongside the requirement for sustainable returns. Over and above the primary impact of financing development projects, there is a significant secondary impact precipitated by development finance institution investments. Private investors often tend to follow suit in frontier markets pioneered by DFIs, enabling the second wave of investors to leverage off established expertise and a coordinated strategy.

In 2005, the combined committed portfolio of DFI investment (including loans, equity, guarantees and debt) amounted to USD 182bn (te Velde, Warner, 2007), with USD 45bn of new commitments being made, indicating a relatively high turnover ratio.  Although, due to very limited information on DFI commitments, updated figures are not readily accessible, anecdotal evidence implies that this figure has, and continues to, increase significantly over time.

Some of the major development finance institutions investing in Africa are the International Finance Corporation (IFC), the Overseas Private Investment Corporation (OPIC), the CDC, as well as a number of European DFIs such as the European Investment Bank (EIB), Proparco, DEG, FMO, Swefund, Norfund, Obvium and a few others. There are also several African DFIs, the largest of which is the African Development Bank, and several regional DFIs.

 

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Author

  • RisCura is a global financial services firm with more than $200 billion in assets under advice and reporting. We partner with institutional investors across emerging markets, bringing specialist investment management, advisory, and analytical expertise to help clients make informed, long-term investment decisions.

    Guided by our “Invest with Care” philosophy, we recognise that investment decisions are not only about money and numbers, but about the people and futures they affect. Through tailored solutions, deep research, and a client-centric approach, RisCura helps investors navigate complexity, manage risk, and create lasting value for their beneficiaries.

    RisCura is known for its focus on liability-driven investing, responsible investment practices, investment transparency, reliable valuations, independent risk assessments, performance standards, and long-term investment outcomes.

    Our capabilities span investment advisory, investment management, investment analytics, institutional platform services, and alternative investment services. Across these areas, we combine consistent methodology and proprietary tools with deep local insight, recognising that each market is unique while responsible investing remains universal.