The African Development Bank Group (AfDB) formally appointed French financial giant Societe Generale following the 2025 Africa Investment Forum (AIF) in Rabat, Morocco, to lead the design of its landmark Multi-Originator Synthetic Securitization Platform (SST Platform), an innovative financial mechanism designed to bypass the continent’s immense financing gaps and dramatically accelerate lending for high-impact sustainable projects by freeing up billions in bank capital.
This agreement, signed at the close of AIF Market Days, marks a crucial strategic shift for the continent’s leading development finance institutions (DFIs), moving them from traditional direct lenders to sophisticated managers of private sector risk.
The SST Platform is an advanced financial engine, known in capital markets as a Synthetic Risk Transfer, which fundamentally alters how development banks utilize their balance sheets. For an African DFI, the act of lending money requires holding a certain amount of capital in reserve against potential losses, capital that then sits idle.
This new platform allows the AfDB to transfer the credit risk of an existing $2 billion portfolio of loans; loans already deployed in critical sectors, to global private investors without physically selling the assets.
This transfer frees up the regulatory capital previously held against those loans, enabling the Bank to immediately recycle that money into new, high-priority lending across Africa. This mechanism is a tangible solution to the perennial problem of capital constraint, ensuring that the development bank’s reserves are constantly revolving to address Africa’s ever-growing needs.
Read also: Ethiopia secures $500M from China bank for $12.5B Bishoftu mega-airport
The urgency of this innovation is rooted in Africa’s severe infrastructure and climate investment shortfall. Current figures show that Africa’s annual infrastructure needs range from $130 billion to $170 billion, but actual investment barely clears $80 billion, leaving an annual gap that exceeds $70 billion. This deficit is not merely a number in a ledger; it translates directly into tangible economic consequences, notably costing the continent an estimated two percentage points in annual GDP growth.
Furthermore, while the continent urgently requires close to $300 billion annually for its climate transition, it currently receives a fraction of that, with private climate finance accounting for a meagre 14 percent of total climate flows. This is the operational reality the SST Platform seeks to change.
By designing the platform as a “Multi-Originator”, initially incorporating assets from the Development Bank of Southern Africa (DBSA) alongside the AfDB, the project tackles the issue of scale and standardization, two major hurdles for large international institutional investors.
A single country’s political risk or a small pool of specialized assets often deters global pension funds and insurers. However, by harmonizing issuance documentation and creating a larger, geographically diversified reference portfolio, the platform creates an asset class that is more palatable and easier for major capital funds to digest.
This scaling effort is essential for projects on the ground, whether it is funding the expansion of the East African Power Pool to connect millions in Kenya and Uganda, or financing green transport corridors in the West African Economic and Monetary Union.
Read also: Morocco champions Africa-Centric ESG standards to unlock sustainable mining investment
The ability of the platform to potentially introduce standardized credit assessment across multiple African institutions paves the way for a more predictable and transparent investment landscape, shifting the narrative from one of high-risk frontier markets to one of structured, investable opportunities for sustainable growth.
The AfDB’s move signals that the future of African development finance lies not in larger cheques from multilateral sources, but in smarter financial technology that unlocks the private wealth already circulating globally, effectively turning DFIs into sophisticated partners for mobilizing capital, rather than just providers.
Engage with us on LinkedIn: Africa Sustainability Matters
