The African Development Bank (AfDB) and Infrastructure Credit Guarantee Company Limited (InfraCredit) have signed a $15 million subordinated loan agreement to strengthen InfraCredit’s capital base and attract institutional investment for Nigeria’s infrastructure projects.
Key Highlights:
Purpose of the Loan:
– The $15 million facility is designed to enhance InfraCredit’s mission of unlocking long-term local currency financing through capital markets. The focus is on mobilizing resources from institutional investors, such as pension funds, to address Nigeria’s infrastructure financing gap.
Signatories:
– The agreement was signed by Lamin Barrow, Director General of AfDB’s Nigeria Country Department, and Chinua Azubike, CEO of InfraCredit, in Lagos.
Strategic Focus:
– InfraCredit aims to ignite Nigeria’s infrastructure revolution by fostering partnerships between institutional investors and infrastructure projects, especially those that are sustainable and climate-friendly. The credit guarantees provided by InfraCredit are crucial in making these projects bankable.
AfDB’s Strategic Objectives:
– This partnership aligns with the strategic objectives of AfDB’s country strategy for Nigeria, which includes promoting local currency bond market financing across key infrastructure sectors. The goal is to stimulate economic diversification and competitiveness in Nigeria.
Statements from Leaders:
– Lamin Barrow, AfDB: “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.”
– Chinua Azubike, InfraCredit: “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.”
– Solomon Quaynor, AfDB: “The success of InfraCredit has inspired the replication of its business model across the continent. The AfDB is pleased to provide additional capital to InfraCredit Nigeria as part of our strategy for scaling up private sector financing in Africa.”
Impacts and Future Prospects:
– Economic Growth: The facility is expected to significantly boost Nigeria’s infrastructure financing, creating jobs and promoting economic development.
– Sustainable Development: InfraCredit’s focus on climate-aligned infrastructure projects will contribute to sustainable energy access and environmental resilience.
– Replicable Model: The success of InfraCredit in Nigeria serves as a model for similar initiatives across Africa, with plans for a comparable institution in Kenya to support the East Africa region.
This collaboration between the AfDB and InfraCredit underscores the importance of innovative financial solutions in addressing infrastructure deficits and fostering economic growth across Africa.
