AfDB, InfraCredit in $15m deal for Nigeria’s infrastructure development

Business a.m.

The African Development Bank (AfDB) and Infrastructure Credit Guarantee Company Limited (InfraCredit), have sealed a deal for a $15 million subordinated loan facility aimed at bolstering InfraCredit’s capital base. The collaboration seeks to draw in much-needed institutional investors’ resources, contributing to Nigeria’s battle against its persisting infrastructure financing gap.

Lamin Barrow, director general of the AfDB’s Nigeria country department, and Chinua Azubike, CEO of Infrastructure Credit Guarantee Company Limited, put their signatures to the subordinated loan agreement in Lagos, recently.

The $15 million facility from the AfDB serves as a power-up for InfraCredit’s mission to unlock vast reservoirs of long-term local currency financing through the capital markets, primarily by harnessing the vast pools of capital at the disposal of institutional investors, including pension funds, in West Africa’s economic powerhouse, Nigeria.

According to InfraCredit, it is on a mission to ignite Nigeria’s infrastructure revolution by forging partnerships between institutional investors, whose abundant resources are waiting to be harnessed, and critical infrastructure projects. With a strategic focus on attracting sustainable, climate-friendly projects, InfraCredit provides the necessary credit guarantees that make these ventures bankable, thus helping to ensure Nigeria’s infrastructure landscape is resilient, eco-friendly, and primed for future growth.

The partnership between the African Development Bank and InfraCredit has been lauded as forward in the realisation of several strategic objectives set forth in the bank’s current country strategy for Nigeria. By encouraging local currency bond market financing across crucial infrastructure sectors, the partnership seeks to breathe new life into Nigeria’s economy, stimulating diversification and competitiveness.

Lamin Barrow expressed the AfDB’s satisfaction with the operation, noting, “Our support to institutions such as InfraCredit demonstrates the importance of promoting innovative and scalable solutions to leverage pools of capital from domestic institutional investors, and position local capital market as a viable alternative source of long-term funding to bridge the continent’s huge infrastructure deficit.”

On his part, Chinua Azubike expressed delight over the AfDB’s confidence in InfraCredit’s business model, which has successfully facilitated private sector investment in impactful infrastructure projects and InfraCredit’s clean energy roadmap that has accelerated green finance for climate-aligned infrastructure, fostering SME growth, job creation, sustainable energy access, and overall economic development.

“Despite challenging market conditions, we have consistently demonstrated strong fundamentals, solid portfolio performance, a proven track record, and profitability. The further expansion of our capital base by this facility will bolster our ability to support access to long-term local currency domestic credit for our rapidly growing pipeline of infrastructure projects currently worth over N625 billion, fostering job creation and economic growth,” he stated.

Solomon Quaynor, vice president for private sector, infrastructure and industrialisation of the African Development Bank Group, said the African Development Bank is pleased to be providing additional capital to InfraCredit Nigeria.

According to Quaynor, the success of InfraCredit has inspired the replication of its business model across the continent. He noted that the key part of AfDB’s strategy for scaling up private sector financing in Africa. This, he explained, is evidenced by the multilateral bank’s support for the establishment of a similar institution in Kenya covering the East Africa region.