AfDB and PIDG Partner to Mobilize $2 Trillion in Local Capital for Africa’s Growth

The African Development Bank Group (AfDB) and the Private Infrastructure Development Group (PIDG) have entered into a landmark partnership to unlock long-term, local currency capital for critical sectors across Africa. The agreement, signed on May 14 at the AfDB headquarters in Abidjan, Côte d’Ivoire, marks a pivotal step toward strengthening African financial ecosystems and accelerating infrastructure-led development.

The signing ceremony brought together top representatives from both organizations, including Solomon Quaynor, AfDB’s Vice-President for Private Sector, Infrastructure and Industrialisation, and Philippe Valahu, Chief Executive Officer of PIDG. This strategic collaboration is poised to foster deep structural economic transformation across Africa by mobilizing resources within the continent rather than relying primarily on external financing.

Unlocking Domestic Wealth for Development

Africa holds an estimated $2 trillion in domestic capital, residing in various national investment pools such as sovereign wealth funds, pension funds, insurance portfolios, and other long-term savings vehicles. Despite this vast reservoir, access to patient, local currency finance remains limited in many countries due to underdeveloped financial markets and investment risk perceptions.

AfDB and PIDG aim to address these barriers by deploying de-risking and credit enhancement instruments that can stimulate investor confidence and incentivize domestic institutional capital to flow into priority sectors. These sectors include energy, transport, housing, industrialization, and other areas that directly contribute to job creation, productivity, and economic resilience.

Building on Proven Models

The agreement is not the first collaboration between the two institutions. AfDB and PIDG have already demonstrated success through joint ventures such as Infracredit Nigeria and the Dhamana Guarantee Company in East Africa. These entities offer credit guarantees that reduce investment risk for local institutional investors, helping to deepen local capital markets and broaden the availability of long-term finance.

The replication and scaling of these models across more African markets are a core feature of the new agreement. According to Quaynor, “The African Development Bank is focused on making Africa’s capital work better for Africa’s development. In this regard, we are pleased to extend our long-standing complementary partnership with the Private Infrastructure Development Group in jointly scaling up the establishment of new onshore credit enhancement facilities.”

A Strategic Response to Global Uncertainty

The partnership gains significance against the backdrop of increasing global economic volatility, geopolitical instability, and tightening international financial markets. Africa’s reliance on foreign capital, particularly in hard currency, often exposes its economies to exchange rate shocks and sudden stops in investment. By contrast, local currency financing provides a more stable, predictable, and sovereign path to development.

PIDG CEO Philippe Valahu emphasized this perspective, stating, “At PIDG, we believe that mobilising Africa’s vast domestic capital is one of the most powerful and sustainable ways to accelerate inclusive growth and infrastructure development. This partnership marks a significant milestone in our joint commitment to scaling proven credit enhancement models that unlock long-term local currency financing.”

Alignment with Long-Term Strategy

This initiative is fully aligned with the AfDB’s recently launched Ten-Year Strategy (2024–2033), which seeks to promote structural transformation, foster inclusive and sustainable growth, and position Africa as a globally competitive investment destination. The strategy prioritizes infrastructure, industrialization, and private sector development—key pillars that will benefit directly from the enhanced financing mechanisms enabled by this partnership.

By mobilizing local capital and building robust financial infrastructure, the collaboration is expected to not only catalyze infrastructure projects but also stimulate private sector participation, reduce dependence on foreign debt, and enhance the overall resilience of African economies.

Looking Ahead

As Africa continues to urbanize, industrialize, and digitize, the need for innovative financial solutions to bridge the infrastructure gap has never been greater. This new partnership between AfDB and PIDG is a clear signal of the growing momentum behind African-led development finance solutions. It showcases how the continent's own resources, when strategically harnessed, can power transformative change.

The success of this initiative will depend on effective implementation, strong stakeholder coordination, and continued innovation in financial structuring. However, the foundations have now been firmly laid, and with strong institutional commitment, Africa stands on the brink of a new era of sustainable and self-driven growth.