AfDB Invests $10 Million in Dhamana to Boost Sustainable Growth in East Africa

Quaynor emphasized that the investment in Dhamana reflects the bank’s commitment to mobilizing financing through innovative credit enhancement mechanisms.

The African Development Bank has made a strategic equity investment of $10 million in Dhamana Guarantee Company, a Nairobi-based firm that provides guarantees to support sustainable enterprises in sectors critical to development, such as transport, water, renewable energy, and waste management. This investment follows an anchor contribution from the UK-Government-backed Private Infrastructure Development Group (PIDG) through its subsidiary InfraCo Africa.

Dhamana has also secured equity investments from County Pension Fund Financial Services (CPF) and technical assistance from Financial Sector Deepening Africa (FSD Africa) and Cardano Development. The company aims to enhance access to financing for sustainable projects across East Africa by providing credit guarantees, and facilitating private institutional investment in infrastructure.

Driving Sustainable Development Goals in East Africa

The African Development Bank's investment, signed at a ceremony in Nairobi attended by Solomon Quaynor, Vice President for Private Sector, Infrastructure & Industrialization, emphasizes Dhamana's role in promoting affordable financing for projects that improve citizens' daily lives and advancing progress toward the UN Sustainable Development Goals (SDGs).

Dhamana’s guarantees are designed to reduce the capital requirements for sustainable infrastructure projects and mobilize local currency financing, contributing to green and sustainable development across East Africa. The initiative will also support climate resilience and align investments with the Paris Agreement targets.

Quaynor emphasized that the investment in Dhamana reflects the bank’s commitment to mobilizing financing through innovative credit enhancement mechanisms. "The African Development Bank’s equity investment in Dhamana reinforces the catalytic role and potential of credit enhancement companies in leveraging opportunities for infrastructure financing in local currency,” said Quaynor, adding that the model could be replicated across Africa.

Leveraging the Success of Credit Enhancement Facilities

Dhamana's creation is inspired by the success of similar credit enhancement companies, such as InfraCredit in Nigeria, which has successfully mobilized local institutional capital for infrastructure development. Gilles Vaes, CEO of InfraCo Africa, underscored the importance of such facilities in unlocking investment in East Africa, with a focus on addressing the climate crisis and achieving the Sustainable Development Goals.

Dhamana CEO Christopher Olobo highlighted the company's potential to connect untapped capital with East Africa’s real economy. “Dhamana’s local currency guarantees will make a tangible difference to people’s lives and offer local investors the opportunity to invest in Paris-aligned initiatives,” Olobo said, expressing optimism about the company's future impact on sustainable finance in the region.

This partnership between the African Development Bank, PIDG, and other stakeholders aims to build a stronger foundation for sustainable infrastructure development in East Africa, fostering long-term economic growth while addressing environmental and social challenges.