Scaling private capital mobilisation into Africa

In a bid to facilitate infrastructure financing and capital mobilisation in Africa, Simon Bessant, the Global Head of Insurance at Texel Group, emphasizes the need for deeper collaboration between development finance institutions, insurance companies, export credit agencies, and the public sector. Bessant highlights the crucial role of institutional investors in bridging the gap in infrastructure funding on the continent, attributing the issue to risk perception. He emphasizes that insurance companies are well-equipped to price and assume risks, making them essential partners in distributing risks within the financial industry. By leveraging insurance products, Bessant suggests creating bridges between the insurance market and institutional investors to facilitate sustainable funding sources for infrastructure projects in Africa. Discussing the economic landscape and the evolving risk environment, Bessant underscores the importance of collaboration among key stakeholders to enhance lending into countries like Nigeria, Kenya, and South Africa where infrastructure development is essential. He emphasizes the significance of partnerships between development finance institutions, multilateral development banks, and the insurance market to scale up lending and make projects bankable. Through risk transfer programs and increased engagement, Bessant envisions creating sustainable funding platforms for infrastructure investments. Reflecting on the outcomes of the roundtable session at the African Investment Forum, Bessant highlights the need for public and private sector cooperation to optimize funding platforms for infrastructure projects. The forum showcased a spirit of collaboration between multilateral development banks and insurance providers to address challenges and foster sustainable lending. Bessant emphasizes the critical role of local capital markets in driving local investment and supporting project finance structures. By incorporating specialized guarantors and insurance providers, he believes that local currency issuances can be enhanced, making transactions more attractive to investors. Leveraging securitization vehicles like the West African Development Bank can further bolster domestic local currency financing structures across the continent. As the conversation concludes, the development of local capital markets is reiterated as a key focus area to catalyze investment and promote financial stability in Africa. Bessant's insights underscore the importance of collaborative efforts and innovative financial solutions to unlock infrastructure financing and drive economic growth across the continent.