How KfW is involved on the African continent

Africa harbours great potential: a wealth of resources, cultural diversity, entrepreneurial spirit and innovative strength. Around half of the 20 fastest growing economies are located in Africa. By 2035, the continent will have the largest labour supply in the world. It is an enormous challenge to utilise this potential of the rapidly growing population - it will double to 2.5 billion people by 2050. One in four of the world's inhabitants will be African. This is where the global markets, employees and customers of the future are growing up. Infrastructure development in particular is booming in Africa in general and in East Africa in particular, where growth of 5.1 % is expected in 2024 and 5.7 % in 2025 (compared to 3.5 % in 2023).

(Source: East Africa | African Development Bank Group (afdb.org))

In this context, the strategic partnerships are of outstanding importance. In cooperation with partner governments, KfW supports the construction of schools and roads, hospitals, sewage treatment plants and water supply systems as well as programmes to promote SMEs, such as the promotional programme for green hydrogen in South Africa or the hydrogen partnership with Morocco. The aim is to promote the global, socially just transition to a climate-neutral and resilient social and economic order.

Despite visible successes, many African countries are fragile. There are ethnic conflicts, armed conflicts and refugee movements. In these contexts, KfW cooperates with UN organisations and non-governmental organisations to care for internally displaced persons and offer them training and jobs.

Jobs are also being created at private companies that KfW subsidiary DEG finances and advises. In addition to local companies, this increasingly includes German companies that are active or want to be active in Africa. The aim of this commitment is to promote entrepreneurship and create prospects for local people. At the end of 2024, financing for companies in Africa/MENA (Middle East and North Africa) accounted for almost 27% of DEG's portfolio at three billion euros. Of the new equity financing committed in 2024, around 609 million euros - or a quarter - was earmarked for Africa/MENA. Here, DEG invests in private infrastructure such as renewable energy projects as well as in local banks - to finance small and medium-sized enterprises locally - and in companies in the agricultural sector or manufacturing industry.

KfW development bank is now also playing an increasingly important role in mobilising private capital. It finances funds on the African continent to promote private sector involvement. KfW is currently involved with 4.6 billion euros in 67 funds in various sectors. Africa has the largest share of the overall impact fund portfolio with 33% (i.e. four out of 12 billion euros). This is a sustainable investment opportunity that focuses on financial returns as well as environmental, economic and social impact.

Further information on impact funds

KfW Development Bank committed a total of 2.6 billion euros for projects in Africa in 2024 - generally on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). A good one billion euros of this is for social infrastructure and services such as food security, health, water and education, and 952 million euros for economic infrastructure and services such as energy and environmental projects.

KfW IPEX-Bank's loan portfolio in Africa currently totals over two billion euros, with a large part of this being concentrated in the continent's economically strong and large countries, particularly Egypt, South Africa and Nigeria. The primary task of the KfW subsidiary is to support German and European companies through export financing. This not only promotes economic development in the partner countries, but also the competitiveness of German companies. These benefit from customised financing for their contractors, whereby KfW IPEX-Bank can contribute its extensive experience with Export-Agency-Credit-covered financing to the benefit of European producers and African customers. The focus is on the areas of mobility infrastructure, renewable energies including green hydrogen and business with local banks.

Status: 28 January 2025