ATI backing helps Japanese banks expand their footprint in Africa - African Trade Insurance Agency

ATI backing helps Japanese banks expand their footprint in Africa

  • ATI has supported US$1 billion worth of transactions from Japanese banks in Africa over the past three years
  • ATI will sign three MOUs at the upcoming Tokyo International Conference of Africa’s Development (TICAD7)
  • ATI will also co-host together with the Nippon Export and Investment Company (NEXI), Japan’s export credit agency, a side-event on Risk Mitigation during TICAD7

NAIROBI, 19 August, 2019 – Japan is preparing to host one of the largest events on the African development calendar, attracting Heads of State and the private sector. The city of Yokohama is hosting Japan’s largest Africa-focused event – the Tokyo International Conference of Africa’s Development (TICAD7) from 28 – 30 August. The meetings, which take place every three years, are the highlight of Japan’s engagement with Africa.

One of the key areas of Japan’s historical partnership with Africa has been the country’s support of Africa’s private sector development. Home to some of the world’s strongest financial institutions, TICAD7 is also an opportunity for Japan’s banks to showcase their growing engagement on the continent. The African Trade Insurance Agency (ATI) has played a significant role in helping in de-risking transactions for Japanese lenders, allowing them to deliver much needed private capital.

In the last three years, ATI has provided insurance to protect some of Japan’s largest lenders against the risk of sovereign default on transactions that have collectively brought close to US$1 billion to the continent. Some of this financing has helped countries to reprofile short-term, and often pricey local currency debt, into longer-term and more affordable structures. The financing has also supported a wide range of priority sectors and, in the case of two ground-breaking capital markets transactions arranged by Japan’s largest bank, ATI-backed financing has facilitated the crowding-in of a new class of institutional investors to the continent.

To showcase their commitment to Africa, Sumitomo Mitsui Banking Corporation (SMBC), Mizuho Bank and NEXI – Japan’s export credit agency, which insures Japanese exporters and banks globally, including Africa, will sign Memorandums of Understanding (MOUs) on the sidelines of the TICAD7. Mitsubishi UFJ Financial Group, Inc. (MUFG) signed an MOU with ATI during ATI’s Annual General Meetings held in Cotonou, Benin, in July. As a further sign of Japan’s commitment, all four MOUs will be exchanged during a high-level formal ceremony during TICAD7.

ATI is also co-hosting a side-event, together with the government-host NEXI, and the Islamic Development Bank (IsDB) and the Islamic Corporation for Insurance of Investment and Export Credit (ICIEC), during TICAD7 on Risk Mitigation Solutions to Help Unlock Opportunities in Africa.

With a strong pipeline of future transactions already in development and these strengthened partnerships, ATI expects to support many more Japanese bank deals across Africa in the coming years.

Quote from John Lentaigne, Acting CEO, African Trade Insurance Agency

“Japan’s largest banks have significantly increased their focus on Africa in recent years. Like ATI, they are seeking opportunities to have a positive impact on the African continent, combining development with commercial success. We’ve seen this in the transactions ATI has de-risked, which are increasingly leading to African countries attracting more competitively priced financing that is, in turn, allowing governments to develop their economies in a more manageable and sustained manner.”

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