The African Trade & Investment Development Insurance (ATIDI) has issued a 10-year Political Risk Insurance (PRI) policy to Sumitomo Corporation, a key Japanese partner in a consortium that invests in Safaricom Telecommunications Ethiopia (STE).
STE is currently the single largest FDI in Ethiopia and one of the most significant Japanese-backed projects in Africa, said Nippon Export and Investment Insurance (NEXI), Japan’s official export credit agency, in a media statement.
The insurance policy covers key political risks such as expropriation, currency inconvertibility and breach of contract, backed by NEXI’s reinsurance support.
“This innovative risk solution exemplifies the growing synergy between ATIDI and NEXI in empowering Japanese companies to seize high-potential opportunities in Africa with greater confidence,” said the statement.
STE was launched at an event held on the margins of the Ninth Tokyo International Conference on African Development (TICAD) last week in Yokohama, co-hosted by NEXI, ATIDI and Mitsubishi UFJ Financial Group (MUFG).
During the TICAD meeting, ATIDI and MUFG signed a Memorandum of Understanding, which will promote collaboration in providing innovative risk mitigation solutions for Japanese investors in Africa. As MUFG looks to bring international and Japanese liquidity to Africa through its work with sovereigns, DFI and blended finance, ATIDI will support with insurance and guarantees to encourage investment, supporting development across the African continent. ATIDI's robust portfolio already covers 72 policies across several African countries, supporting transactions valued at over $5.4bn.
State-owned NEXI became a shareholder of ATIDI in 2023, contributing $15.1m to ATIDI’s capital base, reinforcing its long-term commitment to de-risking Japanese investments in Africa.
Mr Atsuo Kuroda, NEXI’s chairman and CEO, said, “Our collaboration with partners, including ATIDI and MUFG, has enabled us to provide diverse support for Japanese companies’ businesses in Africa. We have been working closely with ATIDI, which led to our reinsurance support for the remarkable telecommunications project in Ethiopia, our investment in ATIDI, and services tailored to Japanese companies such as the Japan Desk.”