Africa’s water investment gap is not being adequately addressed by blended finance, according to Hubert Danso, Chairman and CEO of Africa Investor Group. Danso made this statement at the AU–Africa Water Investment Programme (AU-AIP) Water Summit 2025 in Cape Town.
He expressed concerns that blended finance, despite its popularity, lacks the capacity to deliver on the continent’s infrastructure needs. “I love the enthusiasm around blended finance, but blended finance was designed decades ago… and if the truth be told, blended finance has not really got the depth and the capacity to accomplish any of our goals,” said Danso.
Blended Finance Limitations
Danso noted that even if all blended finance first loss capacity for Africa and emerging markets were combined, it would still only cover less than 10% of the needed investment. “If you bring all of the blended finance first loss capacity together for Africa as well as all emerging markets, less than 10% of what we actually need is available,” he said.
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He argued that the development community is “spending 90% of our time trying to solve 10% of the problem.” Danso also warned that blended finance can increase the cost of capital by creating a perception of loss before projects are considered.
Unlocking Billions for Africa’s Water Sector
Danso proposed four ways to unlock more than $10 billion annually from the $300 trillion in global institutional capital: legally classifying water ecosystems as national infrastructure assets, replacing public-private partnerships with institutional investor public-partnerships, securitising Africa’s natural capital, and creating scalable financial products such as water exchange-traded funds.
These proposals aim to make water development a bankable investment in Africa. “We don’t have to reinvent any wheel. We just have to perhaps let the development finance world understand that if they can’t finance the scope of the need, they should probably never invest in that… the alignment is there, and then we can decide the extent to which our development interests are balanced,” said Danso.
He emphasized the need to make development investable, rather than trying to make investment developmental. Danso’s organisation tends to invest in financial instruments, funds, and strategic platforms, and he believes that water is a sector that can benefit from this approach.
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Making Development Investable
Danso’s philosophy is centered around making development investable, allowing it to unlock social and economic dividends. He noted that private capital is already being invested in well-defined and regulated structures, and that water is a sector that can benefit from this approach.
By making water development a bankable investment, Africa can unlock billions of dollars in funding. Danso’s proposals offer a potential solution to the continent’s water investment gap, and his emphasis on making development investable provides a new perspective on how to address this issue.
The water sector is a critical component of Africa’s infrastructure, and finding ways to unlock funding for this sector is essential for the continent’s development.
