Africa holds a few of the world’s most underutilised power and agricultural sources, house to huge photo voltaic potential, the biggest untapped hydropower and geothermal reserves, and the second-largest share of arable land. But, the continent continues to register the bottom per capita power consumption globally, and funding in vital sectors stays restricted.
“Initiatives with sound fundamentals, bankable financials, credible governance, and visual influence can appeal to higher capital, sooner.”
Africa is at a turning level. With an abundance of pure and human sources, the continent has the potential to reshape its financial trajectory by means of well-structured infrastructure investments. Nevertheless, regardless of clear alternatives, capital mobilisation for even viable initiatives stays a problem constrained by systemic danger and deeply rooted perceptions.
This piece examines the important thing attributes of a bankable mission, the distinctive funding hurdles Africa faces, and methods that may derisk the continent to unlock its potential.
What makes a mission bankable?
A bankable mission provides buyers a transparent line of sight to capital restoration and acceptable returns. Important components embody predictable money flows, offtake agreements, credible sponsors, and complete feasibility research. Buyers in the end ask: Will I get my capital again, and what’s the return?
Globally, sound monetary metrics can typically safe funding. However in Africa, buyers demand extra: sovereign ensures, liens on property, and extra stringent contractual protections. This stems from a belief deficit linked to coverage unpredictability, weak authorized techniques, and restricted recourse within the occasion of disputes. Because of this, bankability assessments prolong past the financials to broader institutional and political dangers.
The infrastructure funding conundrum
Not like equities or short-term monetary devices, infrastructure initiatives function over longer time horizons—permitting for deeper due diligence. But, in apply, improvement finance establishments (DFIs) and buyers typically delay capital disbursement, overestimating the window for execution.
These delays inflate prices and undermine viability. Prolonged timelines imply costlier inputs, outdated know-how, and regulatory shifts that threaten the unique funding rationale. Foreign money depreciation erodes actual worth, whereas poorly monitored execution will increase the prospect of failure. Collectively, these dynamics compound the notion of danger and make African infrastructure much less engaging to capital.
The belief deficit: Notion vs. Actuality
Regardless of posting a decrease sovereign default price than some rising markets, Africa nonetheless struggles to draw funding at aggressive phrases. A key cause is the shortage of dependable and accessible information.
With out sector-level perception, buyers depend on notion, which skews danger assessments and inflates capital prices. Most databases are restricted to the banking and extractive sectors. This data hole creates a cycle: poor information raises perceived danger, which deters funding, reinforcing underdevelopment. Even well-regarded analysis establishments typically lack protection throughout the sectors that matter most to African progress.
Derisking Africa: The place to start out
Africa’s infrastructure hole is estimated between $130 billion and $170 billion yearly. On the similar time, institutional property on the continent – pension funds, insurers, and sovereign wealth funds – exceed $1.6 trillion (AFC, 2025). Over $500 billion in international capital is already Africa-focused (McKinsey, 2023). But, annual infrastructure investments stay under $30 billion. The mismatch is placing.
Learn additionally: Shettima says Africa needs trust, bankable projects to unlock global capital
Addressing this requires structural and perceptual fixes. A number of methods can enhance bankability and appeal to capital:
1. Put money into information availability and transparency
Credible information is foundational to funding choices. Establishments just like the African Union and DFIs ought to construct sector-specific databases and publish accessible, independently verified information. As an illustration, the power sector continues to see disproportionate funding in era, whereas transmission and distribution stay underfunded—weakening all the worth chain. Higher information may redirect capital the place it’s most wanted.
2. Streamline capital disbursement
Delays in disbursement discourage investor participation. DFIs and financiers should steadiness diligence with velocity. AfDB’s authorised capital is $318 billion, but solely $11 billion was deployed in 2024—the best but. Over the past decade, Afreximbank has disbursed simply over $22 billion. These gaps have to be closed to satisfy Africa’s infrastructure wants.
3. Develop standardised mission blueprints
Governments and regional our bodies ought to promote infrastructure templates tailor-made to African contexts—masking compensation methods, anticipated returns, danger mitigation frameworks, and technical requirements. Having pre-vetted, ready-to-execute initiatives reduces data asymmetry and lowers the barrier to entry for buyers.
4. Help first-mover initiatives
DFIs and governments ought to again pilot initiatives in high-risk, high-impact sectors—logistics, inexperienced tech, digital infrastructure, and agribusiness. Success tales function proof of idea. The Dangote Refinery and Ethiopia-Djibouti railway present that complicated initiatives can succeed with the correct execution. A smaller instance—a temperature-controlled storage facility in Uganda or DR Congo—may unlock agricultural commerce and catalyse replication throughout areas.
5. Foster innovation by means of R&D
The continent’s dependence on main commodities displays an innovation hole. Focused funding in analysis and improvement, particularly in agriculture, clear power, digital companies, and healthcare, can remodel productiveness. For instance, soil testing instruments may enhance crop yields and appeal to personal capital. Equally, tackling ailments corresponding to acute respiratory infections—which declare practically 900,000 youngsters below 5 in Africa yearly—affords each influence and industrial alternative.
6. Stabilise the Macroeconomic Setting
Predictable fiscal and financial insurance policies, together with efficient authorized frameworks, are stipulations for long-term funding. Mockingly, some infrastructure funding is dependent upon the very infrastructure being absent, corresponding to electrical car deployment hinging on energy provide. Enhancements in core infrastructure create a reinforcing cycle that helps broader financial participation.
Reframing Africa’s funding narrative
Africa will not be a single funding vacation spot. It’s a continent of 56 international locations and over 3,000 ethnic teams, every with its personal political, social, and financial dynamics. Funding methods should undertake a bottom-up lens, avoiding overgeneralisation. Threat-return profiles fluctuate extensively and have to be assessed accordingly.
Africa is competing with different areas for capital. Whereas its alternatives are huge, so too are investor expectations. To shift the narrative, the continent should spend money on derisking, transparency, and innovation. Initiatives with sound fundamentals, bankable financials, credible governance, and visual influence can appeal to higher capital, sooner.
The window is open. However turning potential into progress is dependent upon execution. Bankable initiatives aren’t simply funding autos; they’re vital levers for Africa’s financial transformation.
Sodiq Opeyemi Lala, Infrastructure Funding Skilled, [email protected]
