MULTINATIONAL - AFAWA Risk Sharing Mechanism

The present project concerns the Affirmative Finance Action for Women in Africa (AFAWA) Risk Sharing Mechanism. The AFAWA’s aim is to close the estimated USD 42 billion financing gap for women in Africa, unlock their entrepreneurial capacity, increase women’s economic participation, and achieve maximum development impact. To unlock Women Empowered-Business (WEB), the Bank is establishing an innovative Risk Sharing Mechanism (“AFAWA Risk Sharing Mechanism or RSM”) with the support of various donors that will catalyse USD 3 billion in new financing to WEBs over an investment period of 6 years. Under the risk-sharing mechanism, the Bank should also act as an implementing partner by providing portfolio guarantees related to women's entrepreneurship directly to the relevant financial institutions lending in the women's entrepreneurship market. The RSM comprises three critical components to ensure successful execution including: (1) an equity capital injection to IPs of up to $75 million, to further strengthen the selected IPs willing to implement the RSM; (2) Additional risk capacity to IPs in the form of portfolio PCGs issued by the Bank of up to $750 million; (3) the provision of a counter guarantee from donors of up to USD 300 million to the Bank, providing sizeable capital relief to the Bank.