AfDB approves $15 million loan to InfraCredit for infrastructure financing in Nigeria
AfDB approves $15 million loan to InfraCredit for infrastructure financing in Nigeria
The African Development Bank (AfDB) has approved a $15 million subordinated loan to Infrastructure Credit Guarantee Company Limited (InfraCredit) in order to strengthen its capital base and address Nigeria’s infrastructure financing gap.
The financing will enable InfraCredit to leverage domestic capital markets and enhance access to long-term local currency infrastructure financing in Nigeria. This loan complements the investment made by the African Development Bank and other partners in 2019, which aimed to mobilize domestic institutional capital for infrastructure projects.
InfraCredit, a specialized Nigerian credit guarantee company, works to attract long-term capital from institutional investors, including pension funds and insurance companies, to support infrastructure development.
The loan comes at a crucial time when InfraCredit is seeking to raise capital to finance an additional $375 million in infrastructure projects over the next few years, primarily by leveraging private-sector financing.
Lamin Barrow, Director General of the Bank’s Nigeria Country Department, expressed his satisfaction with the support given to InfraCredit, stating, “The African Development Bank is pleased to continue supporting an innovative financial institution like InfraCredit, whose objectives closely align with our priorities of mobilizing institutional financing for infrastructure development in key sectors such as transport, energy, water, agriculture, and infrastructure.”
InfraCredit’s track record in green finance and its commitment to the Clean Energy Transition Strategy, Roadmap, and Green Finance Framework is in line with the African Development Bank’s dedication to promoting low-carbon development and leveraging climate finance from private sector sources, added Barrow.
Chinua Azubike, CEO of InfraCredit, expressed delight and gratitude for the confidence shown by the AfDB, saying, “We are delighted and very pleased with the confidence that the AfDB has demonstrated in the opportunity ahead for InfraCredit to scale its development impact of unlocking domestic institutional investments for long-term local currency infrastructure finance in Nigeria.
This will create jobs and support local economic growth. This second round investment will strengthen our guarantee issuing capacity, bringing AfDB’s total investments in InfraCredit to $25 million, which is a strong signal of commitment to the long-term growth of InfraCredit and the Nigerian economy.”
Ahmed Attout, African Development Bank Acting Director for Financial Sector Development, emphasized the Bank’s continued confidence in InfraCredit and recognized its vital role in Nigeria’s infrastructure development.
Attout also stated that the African Development Bank is dedicated to building the capacity of various players in Africa’s capital markets and stimulating long-term funding mobilization for Africa’s infrastructure.
This partnership supports several strategic objectives outlined in the Bank’s current Country Strategy Paper for Nigeria, including stimulating local currency bond market financing across diverse infrastructure sectors, enhancing economic diversification and competitiveness, and prioritizing the delivery of infrastructure in transport, energy, water and sanitation, agriculture, industry, and social development.
The intervention is also aligned with Nigeria’s National Development Plan, which emphasizes strong private sector resource mobilization and participation in delivering the plan’s priorities, including investment in infrastructure and the promotion of the financial sector and capital market development in the country.
By mitigating risks associated with local currency debt instruments, particularly bonds, InfraCredit facilitates financing for infrastructure projects, including those aligned with green and climate objectives in Nigeria. Infrastructure Credit Guarantee Company Limited, established in 2016 by the Nigerian Sovereign Investment Authority in collaboration with GuarantCo (part of the Private Infrastructure Development Group), plays a critical role in achieving these goals.
Distributed by APO Group on behalf of the African Development Bank Group (AfDB).