Africa Finance Corporation (AFC), a leading infrastructure solutions provider in Sub-Saharan Africa (SSA), with Munich Re, one of the world’s leading reinsurers, on Tuesday announced a US$1 billion Unfunded Managed Debt Mobilisation Programme (UMDMP) to support merchandize trade in the continent.
A news report from the African Press Organisation (APO) Group on the deal circulated for the AFC indicated that the programme would provide US$1 billion of committed risk-sharing support for AFC’s trade finance lending to African financial institutions, at a time when African banks needed significant liquidity to finance intra-African and international trade flows that boost their domestic economies.
According to the deal, for African banks, the programme means more trade finance, delivered faster.
Already, Munich Re and AFC have agreed risk parameters and limits up front, so that insurer takes a share of eligible AFC’s transactions automatically just as the corporation retains a part of the risk on every transaction, keeping both institutions’ interests aligned.
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The news report discloses that as the transactions under the programme mature, the programme’s capacity is freed up and reused to finance new investments.
Specifically, the first phase covers commercial letters of credit, trade loans and trade guarantees; the instruments African banks rely on to finance their clients’ imports and exports, starting with 38 financial institutions across 11 African countries, and both parties have agreed to review the programme’s scope, including additional instruments and sectors over time.
Commenting on the programme, AFC’s Executive Board member and Head of Financial Services, Banji Fehintola, said: “Across the development finance landscape, there is a growing recognition that the scale of Africa’s financing needs cannot be met through traditional balance sheet lending alone. Multilateral development banks like AFC are increasingly embracing an originate-to-distribute model, with private capital mobilisation becoming central to how we deliver greater development impact. Managed debt mobilisation sits at the heart of this transition, enabling institutions like AFC to leverage our origination capabilities, structuring expertise and risk management frameworks to attract institutional capital at scale.
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. As the African Continental Free Trade Area deepens trade between African economies, the programme helps to solve committed capacity constraints for banks that finance that trade and strengthens AFC’s ability to be more instrumental in financing Africa’s development”, the investment expert added.
Similarly, Deputy Director & Head of Syndications and AFC Captive Insurance Company Limited, Wola Asase, enthused: “Munich Re has shared risk on AFC loans since 2018, one transaction at a time. This programme replaces that with pre-agreed risk parameters, so eligible trade finance transactions are covered automatically and banks get faster decisions. Because the transactions are short-dated, the capacity is recycled as they mature, and the wider Managed Debt Mobilisation Program it anchors gives us a framework to bring in further institutional investors, whether as funders or risk partners.”
In his remarks on the partnership, Head of Global Credit Solutions at Munich Re, Herbert Müller, further clarified: “Munich Re benefits from the strong pan-African footprint of AFC while AFC benefits from the strong capacity of Munich Re. The trust built between our two organizations through our cooperation since 2018 has allowed us to move from a transactional to a programmatic approach which allows us to support African financial institutions efficiently at scale. We see African trade as a long-term opportunity, and this programme gives us an efficient way to grow our business and improve our diversification at the same time alongside a trusted partner.”
Industry experts believe that insurance and reinsurance are among the financial tools that play a vital role in turning available capital into financing for African businesses and projects; and that by sharing the risk of losses, they enable lenders to support transactions that would otherwise exceed their risk limits, unlocking more funding for trade, industrialisation and job creation.
The latest programme will consolidate the partnership that began in 2018, through which Munich Re shared risk on AFC loans one transaction at a time. The two institutions have completed a series of transactions since then, including two in 2026. The UMDMP turns that deal-by-deal relationship into a standing programme.
The programme also anchors AFC’s broader Managed Debt Mobilisation Program (MDMP), a platform through which other investors can participate alongside AFC, either by providing funding or by sharing risk. AFC is in discussions with other African and global institutional investors about providing funding through the platform.
