The 12-year financing agreement, completed on September 18, is supported by a partial credit guarantee from the African Development Fund (ADF) and second-loss insurance from the Islamic Development Bank Group’s insurance subsidiary.
The ADF is the African Development Bank (AfDB) Group’s concessional financing arm for low-income countries. “This second operation demonstrates the potential of guarantees to mobilise private capital more effectively,” AfDB Financial Sector Development Department Director Ahmed Attout said.
“By combining the ADF guarantee with complementary risk-sharing mechanisms, it enables Benin to secure substantial long-term financing on competitive terms.”
The financing will support priority projects intended to expand essential public services, strengthen economic infrastructure and create employment opportunities for young people and women.
The agreement follows an initial financing operation concluded in 2023 with ADF support.
The latest transaction also follows the Fund’s 17th replenishment, agreed in December 2025. The AfDB described the replenishment as the largest in ADF history.
AfDB said the deal demonstrated how guarantees and insurance could be combined to attract international bank financing for development projects. “This transaction is fully aligned with the Bank’s new strategic vision for supporting our clients, particularly Cardinal Point 1, which seeks to mobilise capital-market resources at scale,” AfDB Country Manager for Benin Robert Masumbuko said.
Masumbuko said the transaction also supported the New African Financial Architecture for Development, which aims to mobilise and direct more capital towards the continent’s development priorities.
The guarantee structure is intended to improve Benin’s access to private financing by distributing risk among the government, ADF, participating banks and the Islamic Development Bank Group’s insurance subsidiary.
AfDB said the operation illustrated the potential for highly leveraged financing structures to expand private investment while delivering tangible benefits to communities.
–AfDB/ChannelAfrica–
