AfDB and InfraCredit Sign $15M Loan to Boost Nigeria’s Infrastructure Financing

The facility will enhance InfraCredit’s capacity to mobilize long-term local currency financing from capital markets, particularly targeting pension funds and other institutional investors in Nigeria.

The African Development Bank (AfDB) and Infrastructure Credit Guarantee Company Limited (InfraCredit) have finalized a $15 million subordinated loan facility agreement aimed at strengthening InfraCredit's capital base. The agreement, signed by Lamin Barrow, Director General of AfDB's Nigeria Country Department, and Chinua Azubike, CEO of InfraCredit, on June 14, 2024, in Lagos, underscores efforts to attract institutional investors to help address Nigeria's infrastructure financing gap.

 

Objective: The facility will enhance InfraCredit’s capacity to mobilize long-term local currency financing from capital markets, particularly targeting pension funds and other institutional investors in Nigeria.

Business Model: InfraCredit operates as a specialized credit guarantee company in Nigeria, facilitating investment in infrastructure projects, including those aligned with green and climate objectives.

Impact and Success: AfDB officials expressed satisfaction with the operation, emphasizing the importance of innovative solutions to mobilize capital from domestic institutional investors. This supports efforts to bridge Africa's significant infrastructure deficit.

Strategic Alignment: Solomon Quaynor, AfDB's Vice President for Private Sector, Infrastructure, and Industrialization, highlighted the replication of InfraCredit's model across Africa. The Bank has supported similar initiatives in Kenya to expand private sector financing in East Africa.

Economic Development: The partnership between AfDB and InfraCredit aligns with strategic objectives under Nigeria's country strategy, promoting local currency bond market financing for infrastructure sectors and enhancing economic diversification and competitiveness.

Future Prospects: InfraCredit plans to leverage the capital infusion to support a growing pipeline of infrastructure projects valued at over NGN 625 billion (approximately US$ 430 million), stimulating job creation and sustainable economic growth.

The agreement marks a significant step towards bolstering Nigeria's infrastructure development and economic resilience through innovative financing solutions and strategic partnerships.