The International Finance Corporation, IFC, has committed $50 million in long term subordinated debt to Infrastructure Credit Guarantee Company Plc, InfraCredit, to strengthen its capacity to finance infrastructure projects in Nigeria.
The 10 year unsecured facility was formalised in Lagos and will be disbursed in two equal tranches of $25 million each.
The financing is expected to strengthen InfraCredit’s capital base and enable the company to support a growing pipeline of infrastructure transactions while mobilising more long term funding in naira for projects across key sectors.
These include renewable energy, climate smart agriculture, telecommunications, digital infrastructure, healthcare and transportation.
The facility is backed by the International Development Association Private Sector Window Blended Finance Facility and the Concessional Capital Window.
InfraCredit provides credit guarantees for infrastructure related debt transactions and uses these guarantees to attract domestic institutional investors to projects that require long term financing.
The company said the latest investment would increase its capacity to mobilise domestic capital while supporting the development of Nigeria’s local debt market.
Since it began operations in 2017, InfraCredit said it has facilitated more than N600 billion in long term local currency financing across 28 infrastructure projects. It has also supported 14 first time issuers in accessing the domestic debt capital market.
The company has been involved in transactions that have created new benchmarks in Nigeria’s bond market, including the country’s first 15 year green infrastructure bond. Its guaranteed transactions have also helped extend corporate bond maturities to as much as 20 years.
InfraCredit said its guaranteed infrastructure bonds have attracted participation from domestic institutional investors, including 20 of Nigeria’s 25 Pension Fund Administrators.
Aliou Maiga, IFC’s Financial Institutions Group Director for Africa, said the investment would support the mobilisation of domestic resources for infrastructure development.
“By supporting InfraCredit’s institutional capacity, we are helping mobilise domestic resources for infrastructure investments that can drive economic growth, job creation and sustainable development across key sectors of the Nigerian economy,” Maiga said.
He added that IFC was pleased to deepen its partnership with InfraCredit as the company continues to contribute to the development of Nigeria’s local capital markets.
Chinua Azubike, Chief Executive Officer of InfraCredit, said strengthening the company’s institutional capacity had become important as its transaction pipeline grows and its financing solutions expand.
He said the IFC facility would improve InfraCredit’s ability to mobilise long term domestic capital for infrastructure projects.
Azubike also said the investment showed continued confidence from international development finance institutions in InfraCredit’s business model.
“This breadth of support is a significant competitive advantage and reflects the maturity and resilience of our institution,” he said.
The latest facility adds to support from other development finance institutions and partners that have provided InfraCredit with equity, subordinated debt, risk sharing arrangements, counter guarantees and other financing support.
InfraCredit said the new funding would strengthen its capital base and help expand the availability of long term private capital for sustainable infrastructure projects in Nigeria.
