The critical role of de-risking in infrastructure development

Africa’s infrastructure sector stands at a pivotal juncture, with significant opportunities for growth and development. However, the continent’s vast potential remains largely untapped due to perceived investment risks, including policy instability, currency fluctuations, and project execution challenges. To bridge this gap, experts emphasise the importance of de-risking strategies that can unlock substantial private sector investment and drive sustainable infrastructure development.

The need for de-risking

According to a recent analysis by TechCabal, institutional capital remains cautious in Africa, but public and private partnerships can de-risk investments to spur infrastructure development. Innovative financial instruments, such as green bonds, ESG-linked loans, and viability gap funding, are emerging as effective tools to improve project bankability and reduce perceived risks. For instance, the participation of Development Finance Institutions (DFIs) in Public-Private Investment (PPI) projects increased from 18% in 2022 to 40% in 2023, highlighting the growing role of blended finance in de-risking infrastructure projects. 

Infrastructure Africa’s role

Infrastructure Africa, a leading platform for infrastructure development on the continent, is at the forefront of advocating for de-risking strategies. By facilitating dialogue between governments, investors, and development partners, Infrastructure Africa aims to create an enabling environment that attracts and sustains private sector investment. The upcoming Infrastructure Africa Business Forum, scheduled for 2–3 March 2026, in Cape Town, will focus on strategies to de-risk infrastructure investments and promote sustainable development across the continent.

The path forward

To realise Africa’s infrastructure potential, a concerted effort is required to implement de-risking mechanisms that enhance project bankability and investor confidence. This includes strengthening policy frameworks, improving project preparation, and leveraging innovative financing solutions. By addressing these challenges, Africa can unlock the necessary investment to build resilient infrastructure that drives economic growth and development.