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Africa Finance Corporation Invests $20 Million in Dhamana to Boost East African Infrastructure
Unlocking Local-Currency Financing
The Africa Finance Corporation (AFC) has announced a strategic equity investment in Dhamana Guarantee Company Limited, a credit enhancement facility dedicated to the East African region. The AFC has committed up to $20 million in capital, with an initial $10 million tranche already deployed into Dhamana’s core capital.
The primary goal of this investment is to bridge the gap between long-term institutional savings (such as pension funds) and bankable infrastructure projects. By providing guarantees, Dhamana enables developers to access domestic debt markets on significantly improved terms.
The Credit Enhancement Model
Dhamana operates as a “credit enhancer,” a middleman that improves the credit profile of infrastructure bonds. This model is based on the highly successful InfraCredit Nigeria framework, of which AFC was also a founding shareholder.
How it Works:
- Risk Mitigation: Dhamana provides guarantees to infrastructure bonds, making them safer for conservative investors like pension funds.
- Local Currency Focus: By utilizing domestic capital, projects avoid the exchange rate volatility associated with foreign-denominated debt.
- Financial Inclusion: The facility supports local financial institutions in deepening their involvement in large-scale regional development.
Strategic Leadership and Governance
Leaders from both institutions highlighted the partnership as a “major institutional endorsement” for the region:
- Banji Fehintola (AFC): Emphasized that the investment builds on AFC’s success in West Africa to accelerate infrastructure delivery across the East.
- Christopher Olobo (Dhamana CEO): Noted that AFC’s involvement strengthens Dhamana’s capital base, governance, and strategic ability as they scale operations.
Impact Across East Africa
Dhamana is backed by a consortium of development partners and institutional investors. Its current pipeline of projects spans multiple essential sectors, including:
- Energy and Transport: Improving regional connectivity and power stability.
- Telecommunications: Expanding digital infrastructure.
- Heavy Industry: Supporting local manufacturing through specialized project structuring.
By mobilizing domestic institutional capital, the partnership seeks to create a self-sustaining cycle of investment where African savings are used to build African infrastructure, ensuring long-term financial sustainability and measurable developmental impact.
