Local Currency Finance and the Next Phase of African Infrastructure

The hidden cost of hard-currency debt

Infrastructure assets earn revenue in local currency. When they are financed in hard currency, a depreciation can turn a sound project into a distressed one. The risk is borne by sponsors, consumers and, ultimately, sovereign balance sheets.

Why local institutions are the natural funders

Pension funds and life insurers have local-currency, long-dated liabilities. Infrastructure with local-currency, long-dated cash flows is a natural match — if it can be structured to institutional standards.

Structuring for institutional investors

• Asset-backed structures referencing contracted cash flows from creditworthy counterparties.
• Credit enhancement from DFIs or guarantee facilities to reach investment-grade equivalents.
• Listing on domestic exchanges to satisfy regulatory eligibility and support secondary liquidity.

AOA is structuring a local-currency infrastructure platform underpinned by contracted telecom-tower cash flows in Ghana, illustrating how these principles can be applied in practice.