Financing and structuring an African investment from the UAE

An African project is financed in layers, and each layer carries a different risk, return and say over the business. The sponsor’s equity takes the first loss, lenders and development finance institutions (DFIs) rank above it, and an offtake contract supplies the cash flow that pays them all.

UAE deals show the layers at work. When International Resources Holding (IRH) took 51% of Zambia’s Mopani Copper Mines in 2024, it paired USD 620 million of equity with up to USD 400 million of shareholder loans. AMEA Power’s 2023 Africa plan combined USD 1 billion of equity with USD 4 billion of project finance for 5 GW of power by 2030.

The offtake contract decides how much debt a project can carry. Where the buyer is a state utility, its payment record and any government guarantee behind it matter as much as the technology.

DFIs lend, invest and guarantee where commercial banks hold back, and their presence in a deal brings scrutiny that improves it. Four matter most for a Gulf investor:

• African Development Bank (AfDB): the continent’s multilateral development bank co-leads Mission 300 with the World Bank. The program aims to connect 300 million Africans to electricity by 2030, 50 million of them through the AfDB. The two banks had committed about USD 15 billion combined, as reported in June 2026.
• Afreximbank: the African Export-Import Bank reported total assets and contingencies of USD 48.5 billion for 2025, up 21%, with net loans of USD 33.5 billion. Its subsidiary FEDA, the Fund for Export Development in Africa, takes equity stakes, and AfrexInsure provides insurance. Some rating agencies raised concerns about the bank during 2025.
• Africa Finance Corporation (AFC): with 48 member countries and USD 19.23 billion of assets at end-2025, AFC offers project development, structuring, debt, equity and syndication in energy, resources, heavy industry, transport and telecoms. Its 2025 results report the close of the USD 2 billion Kano–Maradi railway.
• MIGA: the World Bank Group’s guarantee agency plans USD 6.4 billion of Africa guarantees a year over 3.5 years. Announced in May 2026, the plan aims to mobilize USD 23 billion of private capital. Its tools include political risk insurance, credit enhancement and portfolio guarantees.

The AfDB’s products for private investors, such as partial risk guarantees, could not be confirmed in our research, so ask the bank directly. Under Mission 300, the International Finance Corporation (IFC) and MIGA reduce risk for private energy investment.

The UAE has its own finance tools for African deals: a development fund, an export finance office and a federal export credit agency. Each joins a deal for a different reason:

• Abu Dhabi Fund for Development (ADFD): committed USD 1 billion to the basic infrastructure of clean energy projects under the Africa Green Investment Initiative. It has also invested alongside UAE companies, holding 8.7% of the vehicle through which e& (then Etisalat) bought 53% of Maroc Telecom in 2014.
• Abu Dhabi Exports Office (ADEX): ADFD’s export finance arm opens credit lines with African banks so their clients can buy UAE goods. They include a USD 100 million revolving facility with National Bank of Egypt (September 2023) and a USD 20 million line to the ECOWAS Bank for Investment and Development (June 2022). A 2021 agreement covers the Eastern and Southern African Trade and Development Bank (TDB).
• Etihad Credit Insurance (ECI): the UAE’s federal export credit agency (ECA) committed USD 500 million of credit insurance to the same initiative to reduce risk for private capital.

The Africa Green Investment Initiative, announced at the African Climate Summit in Nairobi in September 2023, shows how these pieces fit together. Its components, as listed by AGBI, are:

AGBI’s text speaks of USD 4 billion of direct investment, but the components it lists add up to USD 4.5 billion, the figure in the initiative’s name. A UAE minister said in February 2026 that USD 4.5 billion had been mobilized for more than 60 projects.

Islamic finance gives Gulf investors a familiar way into African deals, through sovereign sukuk and through Sharia-compliant project and trade finance. The market is still small, and speculative-grade where it is rated.

Fitch counted more than USD 7 billion of African sukuk outstanding in August 2026, up 16% in a year. Egypt held 48% of the total, Nigeria 26%, South Africa 15% and Benin 7%. All rated African sukuk, about USD 3.7 billion, are speculative grade.

Recent issues show the range of terms:

• Egypt: a debut USD 1.5 billion sukuk in February 2023, then a USD 1 billion three-year Ijara sukuk at 7.875% in June 2025, privately placed and underwritten by Kuwait Finance House. Egypt also issued its first local-currency sukuk in 2025.
• Nigeria: a sovereign program since 2017; its seventh issue in May 2025 raised ₦300 billion (about USD 190 million) over seven years at 19.75%.
• Senegal: XOF 330 billion (about USD 525 million) of Ijara sukuk in June 2022, in 7, 10 and 15-year tranches.
• Côte d’Ivoire: a CFA 150 billion (about USD 244 million) five-year Ijara sukuk in December 2015, with 38% of investors from the Middle East.

Figures for Nigeria’s cumulative issuance conflict. A May 2024 study puts it at USD 1.43 billion, while African Business (August 2025) gives ₦1,392.5 billion, about USD 892 million, across seven issues. The gap likely reflects the naira’s fall when the totals are converted into dollars.

Beyond sovereign paper, Gulf investors use Sharia-compliant contracts for their own deals. An Ijara is a lease of an asset, a Murabaha a cost-plus sale for trade and equipment, and a Musharaka a partnership that shares profit and loss. Gulf Islamic banks and the Islamic Development Bank’s private sector arm (ICD), which arranged the Ivorian sukuk, structure financing on these terms.

Where you hold an African investment decides how profits are taxed, which treaties protect you and which courts hear a dispute. The table compares five routes, including an entity in the Dubai International Financial Centre (DIFC) or Abu Dhabi Global Market (ADGM), with UAE tax facts at the time of writing. It refers to bilateral investment treaties (BITs) and double taxation agreements (DTAs):

At the time of writing, UAE corporate tax applies to financial years starting on or after 1 June 2023. Large multinational groups are also subject to a 15% Domestic Minimum Top-up Tax for financial years starting on or after 1 January 2025. It applies where consolidated global revenue reached EUR 750 million or more in at least two of the four preceding years.

The DIFC and ADGM are financial free zones with their own legal frameworks. The DIFC Courts are English-language common law courts, and ADGM, founded in 2013, applies English common law directly. Investors use them for holding companies because shareholder agreements and security can be written under a system familiar to international lenders and co-investors.

Treaty access depends on where and how the holding company is set up. The UN Conference on Trade and Development (UNCTAD) lists 20 UAE BITs in force with African countries, and the UAE Ministry of Finance counts 137 DTAs concluded worldwide. African DTAs confirmed in our research include Rwanda (in force December 2019), Zambia and Gabon (both in force 2023) and Tanzania (signed September 2022).

When investing in Africa, a return counts only once it reaches your account in the UAE, so plan repatriation from the first draft of the structure. Three factors decide it: local rules on transfers, the supply of foreign exchange and treaty protection.

Several markets now write the right to transfer into law. Morocco’s Investment Charter (Framework Law 03-22, December 2022) guarantees the transfer of profits and capital, and its dividend withholding tax is 11.25% in 2026, falling to 10% from 2027. Tanzania’s Investment and Special Economic Zones Act of February 2025 guarantees the repatriation of profits and dividends.

Foreign exchange supply has improved where currencies floated. Ethiopia abolished its waiting list for foreign exchange in July 2024, and Nigeria’s gap between official and parallel rates narrowed from more than 60% to under 5%. A legal right to transfer still depends on the central bank having dollars to sell, so register your foreign capital with the central bank at entry where the law requires it.

Treaty protection is the last line. A BIT in force can include a commitment on the free transfer of returns, enforceable through arbitration. A DTA can reduce withholding tax on dividends, interest and royalties if your holding company qualifies as UAE tax resident. Check the wording of both treaties for your target country.

Currency hedging protects the dollar value of local-currency earnings. Investors combine three approaches, because no single one covers the full risk:

• Currency forwards and options: banks sell forwards and options where a currency market is deep enough. Their price reflects the interest rate gap between the two currencies, and tenors are shorter in thin markets, so they suit a dividend or a payment more than a project’s whole life.
• Local-currency debt: borrowing in the currency you earn removes the mismatch, at a higher headline rate. Nigeria’s seven-year naira sukuk priced at 19.75% in May 2025, and Ghana’s policy rate stood at 21.5% after a 650 basis point cut in 2025, while Kenya’s was 8.75% in September 2026.
• Natural hedges: earn in dollars, or in a currency you also spend. Ethiopian exporters keep 50% of their foreign exchange earnings and firms in special economic zones keep 100%, which makes export activity a natural hedge. Tariffs linked to the dollar, where a regulator allows them, do the same for power and infrastructure.

Regional payment links reduce the need for dollars between African currencies. The Pan-African Payment and Settlement System (PAPSS) settles payments in local currencies and claims up to 80% lower foreign exchange needs. It reported more than 30 member countries in September 2026, while another report that month said it was live in 28. The currency section explains the regimes any hedge starts from.