GuarantCo guarantees the Contingent Capital Facility of Dhamana to mobilise sustainable infrastructure finance in East Africa

  • Date written
  • January, 2026

GuarantCo, part of the Private Infrastructure Development Group (PIDG), has provided a USD 20 million guarantee (KES equivalent) for the Contingent Capital Facility (CCF) of Dhamana Guarantee Company based in Kenya. The guarantee has a tenor of 23 years.

GuarantCo guarantees the Contingent Capital Facility of Dhamana to mobilise sustainable infrastructure finance in East Africa

Dhamana is the most recent Credit Enhancement Facility (CEF) established by PIDG with a mission to mobilise local currency private sector financing into critical sustainable infrastructure projects and develop local capital markets by providing non-payment credit guarantees. The CCF, enabled by GuarantCo’s credit enhancement, will allow Dhamana to expand its capital base and increase the size and quantum of guarantees that it can issue. The CCF supports Dhamana’s growth and profitability in a non-dilutive way for shareholders.

In addition, Dhamana will benefit from the 20 years of knowledge and experience that GuarantCo brings in writing guarantees in low to middle-income countries, which is aligned with GuarantCo’s mandate to build local market guarantee capacity by supporting the development of CEFs.

Kenya has invested heavily in infrastructure development in recent years, and the progress made is a key factor in transforming the economy, enhancing domestic and regional connectivity and strengthening Kenya’s position as a regional hub. However, the country’s infrastructure deficit prevails, exacerbated by an infrastructure financing gap of c. USD 5 billion annually. Dhamana therefore has a vital role to play in attracting and multiplying local currency private capital into sustainable infrastructure projects.

The primary route to delivering sustainable development impact from this transaction is market transformation, as Dhamana is the first CEF backed by the private sector in Kenya and as such will increase the availability of domestic capital for sustainable infrastructure. The transaction also facilitates the mobilisation of local currency investment into new infrastructure-related asset classes. Additionally, Dhamana will only pursue transactions that are Paris Aligned, and estimates that 30-40 per cent of the portfolio will be classed as climate finance.

It is anticipated that the transaction will contribute towards the United Nations’ Sustainable Development Goals 9 (industry, innovation and infrastructure) and 13 (climate action).

PIDG has provided a Technical Assistance grant to support the capacity building and operationalisation of Dhamana, enabling it to mobilise local capital for infrastructure development in East Africa. This targeted support helped fund the establishment of Dhamana’s risk department, development of core policy and procedure templates, and a range of activities including lender due diligence, pipeline transaction support, market development and brand building. Together, these interventions have accelerated Dhamana’s startup phase, strengthened its institutional capacity, and positioned it to deliver innovative guarantee backed financing solutions that will unlock new opportunities for infrastructure development.

Dave Chalila, Head of Africa and Middle East Investments at GuarantCo, said:

“We are pleased to reach financial close on this important transaction, which has been several years in the making. The deal epitomises the ‘One PIDG strategy’ in mobilising private sector investment in sustainable infrastructure projects in East Africa. Through our work with our project development and technical assistance colleagues within PIDG, we have shown the power of blended finance and catalytic capital allowing Dhamana to do more and go bigger, while ensuring risk is well-managed from a lender perspective.

“With lessons learnt and applied from the launch of previous CEFs in Nigeria and Pakistan, this transaction sets the pathway for future CCFs to enable knowledge sharing and collaboration without compromising independence.” 

Christopher Olobo, CEO of Dhamana, commented:

“Securing this Contingent Capital Facility marks an important step forward for Dhamana and demonstrates strong support for our approach and for the ongoing development of East Africa’s local capital markets. In addition to funding, we gain valuable insights from GuarantCo’s twenty years of expertise in establishing guarantee markets in emerging economies, which aligns with our goal to attract significant domestic private capital. As Kenya and the wider East African countries continue to experience a shortage in infrastructure financing, Dhamana is well placed to bring local institutional investors into innovative asset categories that offer both financial returns and developmental benefits. This collaboration strengthens our commitment to transform local capital markets and promote inclusive, climate-resilient growth throughout East Africa.”

NOTES TO EDITORS

About GuarantCo

GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. Since 2005, GuarantCo has enabled USD 7.1 billion of total investment and USD 6.8 billion of private sector investment, giving 44.8 million people access to infrastructure and creating around 248,000 jobs. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development. www.guarantco.com

About PIDG

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and southeast Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of pioneering, partnership, safety, inclusivity, and urgency.

 

PIDG offers technical assistance for upstream, early-stage activities and concessional capital; invests in early-stage project development and project and corporate equity through its project development solution, InfraCo; its debt solution EAAIF (the Emerging Africa & Asia Infrastructure Fund) is one of the first and more successful blended debt funds in low-income markets; and its guarantees solution, GuarantCo, provides credit enhancement and local currency solutions to de-risk projects. PIDG also supports a growing portfolio of local credit enhancement facilities, which unlock domestic institutional capital for infrastructure financing.

 

Since 2002, PIDG has supported 258 infrastructure projects to financial close, which provided an estimated 232 million people with access to new or improved infrastructure. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia and Sweden, and Global Affairs Canada. www.pidg.org

About Dhamana

Dhamana Guarantee Company (dhamana) is a specialized East African financial guarantor established to unlock domestic capital for the real economy. The company provides innovative local-currency guarantee solutions that enable projects, businesses, and public entities to access longer-tenor, affordable financing –addressing a domestic liquidity gap.

 

Dhamana’s founding shareholders include the Private Infrastructure Development Group (PIDG), a UK-government backed infrastructure investor focused on sustainable projects in sub-Saharan Africa and Asia; the African Development Bank (AfDB), Africa’s premier development finance institution supporting economic and social progress across the continent; and County Pension Fund Group (CPF), a Kenyan pension and financial services provider investing locally in diversified, long-term opportunities. Together, these investors bring strategic capital and deep expertise to support Dhamana’s mission.

 

Operating across East Africa, Dhamana offers unconditional and irrevocable guarantees on local-currency debt instruments, including bonds and loans, ensuring the timely payment of principal and interest. The company supports private infrastructure, structured finance, and public sector financing with tenors of up to 20 years and can scale transactions through syndication and co-guarantees. Dhamana plays a catalytic role in deepening domestic capital markets, crowding in institutional investors, and shaping East Africa’s long-term financial future (www.dhamana.com).