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Paving the way for more Japanese investments into Africa

ATI expects to support many more Japanese exporters and banks in deals across Africa in the coming years. (Image source: ATI)

On the sidelines of the Tokyo International Conference of Africa’s Development (TICAD7), African Trade Insurance Agency (ATI) signed MoUs with Japan’s three largest banks and Nippon Export and Investment Insurance (NEXI), Japan’s export credit agency

ATI and NEXI announced the launch of a Japan Desk to be based in ATI’s Nairobi headquarters to provide tailored risk-mitigation support to Japanese companies and investors. ATI has a pipeline of more than US$1bn worth of transactions from Japanese banks.

The Tokyo International Conference of Africa’s Development (TICAD7), which has grown into one of the largest Africa-focused international events, provided a platform for billions worth partnerships and transactions to be sealed. The two institutions committed to strengthening risk mitigation cover to entice more Japanese companies and investors to enter the African market. The Japan Desk will facilitate this process.

Mitsubishi UFJ Financial Group (MUFG) signed an earlier MoU with ATI. The agreements signal to the world that Japan views Africa as a strategic investment destination, which will provide an opportunity for Japanese companies and investors to more effectively capitalise on the current opportunities in the fastest-growing continent in the world.

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$1bn 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 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.

With a strong pipeline of transactions valued at more than US$1bn along with these strengthened partnerships, ATI expects to support many more Japanese exporters and banks in deals across Africa in the coming years.

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