Africa Finance Corporation (AFC) and Munich Re have announced a US$1 billion Unfunded Managed Debt Mobilisation Program aimed at supporting trade finance lending to African financial institutions.
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The programme provides committed risk-sharing support for eligible AFC trade finance transactions. Its first phase covers commercial letters of credit, trade loans and trade guarantees, beginning with 38 financial institutions across 11 African countries. The countries and participating institutions were not identified in the announcement.
Pre-agreed risk-sharing structure
Under the arrangement, AFC and Munich Re agreed risk parameters and limits in advance. Munich Re can therefore automatically take a share of eligible AFC transactions that fall within the agreed framework, while AFC retains part of the risk on every transaction.
The structure is intended to support quicker decisions on qualifying trade finance transactions. Its capacity can also be reused as transactions mature, allowing the available support to be recycled for new investments.
Wola Asase, Deputy Director and Head of Syndications and AFC Captive Insurance Company Ltd, said the agreement replaces the transaction-by-transaction approach previously used by the two institutions.
“This programme replaces that with pre-agreed risk parameters, so eligible trade finance transactions are covered automatically and banks get faster decisions,” Asase said.
Part of wider mobilisation platform
The new arrangement anchors AFC’s broader Managed Debt Mobilisation Program, which is designed to allow other investors to participate either by providing funding or sharing risk.
AFC said it is in discussions with other African and global institutional investors about providing funding through the platform. The two parties also agreed to review the programme’s scope over time, including the possibility of adding further instruments and sectors.
Banji Fehintola, AFC’s Executive Board Member and Head of Financial Services, said the programme reflects a shift towards using private capital alongside development finance institutions’ own balance sheets.
“This programme with Munich Re demonstrates how we can translate that ambition into practical, scalable solutions that expand financing capacity while optimising the deployment of our own capital,” Fehintola said.
Partnership dating to 2018
The initiative builds on cooperation between AFC and Munich Re that began in 2018. Under the earlier arrangement, Munich Re shared risk on AFC loans one transaction at a time. The new programme moves that relationship to a broader, programme-based structure.
Herbert Müller, Head of Global Credit Solutions at Munich Re, said the arrangement would enable the companies to support African financial institutions more efficiently at scale.
AFC established AFC Captive Insurance Company in August 2026 as a wholly owned Bermuda-based subsidiary, backed by up to US$30 million in equity capital.
AFC was established in 2007 and has 48 member countries. The corporation reports that it has invested more than US$19 billion in 36 African countries since its inception. Munich Re provides reinsurance, primary insurance and insurance-related risk solutions and operates globally across the insurance business.
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