Africa’s efforts to close its infrastructure financing gap could face mounting pressure as declining development assistance and the small size of investment projects limit access to international capital, prompting calls for a shift towards larger, pooled financing structures.
The continent faces an annual infrastructure financing shortfall of between $60 billion and $100 billion, according to the African Development Bank, while official development assistance (ODA) to sub-Saharan Africa declined by 26 percent in 2025, with a further 12 percent contraction projected for 2026.
S&P Global Ratings, in a report titled From Project to Platform Financing: Scaling Up Investments in Africa Through Blended Finance, said Africa must move away from financing individual infrastructure projects towards standardised investment platforms capable of pooling assets, increasing deal sizes and attracting institutional investors.
The ratings agency said the transition could unlock larger pools of international capital at a time when traditional development financing is becoming increasingly constrained.
“Africa’s blended finance market has expanded fivefold over the past decade to approximately $10 billion annually from between $2 billion and $3 billion in 2015. However, the growth has not translated into sufficient financing to address the continent’s infrastructure needs,” it said.
According to the report, cumulative blended finance transactions in Africa reached between $80 billion and $90 billion over the decade, with West Africa accounting for an estimated 40 to 50 percent of the total.
Despite this expansion, financing remains concentrated in a handful of countries. Nigeria, Ghana, Côte d’Ivoire and Senegal account for between 75 and 80 percent of blended finance activities in the region, leaving several other African economies with limited access to development capital.
Blended finance combines public and private funding to encourage private sector investment in markets where perceived risks often discourage commercial investors.
S&P said the structure has become an important development financing instrument but remains constrained by the relatively small size of African projects, complex transaction structures and insufficient credit enhancements.
One of the biggest obstacles is the minimum investment threshold required by international institutional investors.
The report noted that most large institutional investors require debt issuances of at least $100 million to justify the operational costs associated with an investment, while some prefer significantly larger and more liquid transactions.
However, many African infrastructure projects fall below this threshold, with typical transaction sizes ranging between $10 million and $100 million and a median of just $35 million to $55 million.
This compares with median deal sizes of $55 million to $65 million in Asia and $60 million to $70 million in Latin America.
In developed markets such as the United States and Western Europe, median transaction sizes range between $100 million and $500 million, supported by deeper bond markets, standardised contracts and stronger credit ratings.
S&P said the mismatch between the financing needs of African projects and the investment requirements of global capital providers has restricted the continent’s ability to attract pension funds, insurance companies and large asset managers.
The agency noted that many African blended finance instruments also lack investment-grade credit ratings, which limits their eligibility for institutional portfolios because of regulatory restrictions and internal investment guidelines.
To address these constraints, S&P is advocating a platform-based financing model that combines multiple infrastructure assets into larger investment vehicles.
Under this approach, individual projects could be pooled into diversified portfolios, increasing transaction sizes while spreading risks across different sectors and geographical markets.
The report identified several initiatives demonstrating the potential of this financing model, including the Africa Infrastructure Financing Facility (AIFF), Emerging Africa & Asia Infrastructure Fund, Mission 300 and the Lobito Corridor.
The Africa Infrastructure Financing Facility, launched in February 2026 by multilateral lending institutions, secured an initial commitment of $1.5 billion to finance long-term domestic capital and cross-border infrastructure projects aligned with the African Union’s Agenda 2063.
Similarly, the Lobito Corridor, a 1,300-kilometre railway project connecting Angola with the Democratic Republic of Congo and Zambia, has attracted commitments of $6 billion, with financing expected to exceed $10 billion.
The project combines public financing, private-sector concessions and structured financing arrangements to support infrastructure development and facilitate the export of critical minerals.
Its financing structure includes $553 million from the US International Development Finance Corporation, $200 million from the Development Bank of Southern Africa, and $555 million from a private operating consortium.
S&P said the initiative provides an example of how large-scale infrastructure programmes can combine different sources of capital to achieve the transaction sizes required by international investors.
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Chinwe Michael is a Nigerian business journalist and media professional with over 4 years of experience covering companies, financial markets, banking, fintech, economic policy, financial inclusion, and corporate affairs. She currently leads the Companies & Markets desk at BusinessDay, where she drives coverage of Nigeria’s corporate and capital markets, translates complex financial data into accessible stories, and mentors younger journalists. Prior to that, she was the head of the financial inclusion/fintech desk. With a background in banking and finance and extensive experience in media and communications, Michael has developed expertise in financial journalism, economic analysis, investigative reporting and market intelligence. Her work examines how monetary policy, corporate performance, capital flows, technology, and regulatory decisions affect businesses, investors, and households. She was selected from about 3,000 applicants as one of 20 journalists for Cohort 4 of the MTN Media Innovation Programme, gaining exposure to new approaches to journalism, technology, and media innovation. Her international journalism experience and engagement with professionals across Russia, Dubai, Saudi Arabia, and others in different sectors have further broadened her understanding of global communication and development.
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