United Capital Introduces N150bn Close-ended Infrastructure Fund

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By Dipo Olowookere

A close-ended fund worth N150 billion aimed to provide long-term financing for the delivery of critical infrastructure that would bridge the infrastructure deficits in Nigeria and sub-Saharan Africa has been introduced by United Capital Plc.

A notice from United Capital said the Naira-denominated infrastructure fund has been registered with the Securities and Exchange Commission (SEC).

Business Post reports that proceeds from the N150 billion issuance programme would be used specifically “to finance bankable infrastructure assets that cut across sectors such as power and renewable energy, transportation, agribusiness and industrial infrastructure, healthcare, technology, mass housing, urban and social infrastructure.”

“The journey to launch the fund has taken almost two years, during which period extensive preparatory studies and appraisals were carried out to establish the business case for the fund, as well as to define a model and governance framework that would provide investors that have an appetite for long-term financing products (such as pension funds and insurance companies), with sufficient confidence of the attractiveness of UCIF, as an investment opportunity,” the Group Chief Executive Officer of United Capital, Mr Peter Ashade, stated.

On her part, the CEO of United Capital Asset Management Limited (UCAML), Mrs Odiri Oginni, disclosed that the team was working on building strategic alliances with financing counterparts such as multilateral and public authorities, to ensure that appropriate financing securities and credit enhancement instruments are in place to de-risk the fund’s portfolio investments.

She revealed that “during the almost-two years of preparatory activities, the fund management team scanned, screened and appraised numerous infrastructure projects and is now at advanced stages of conducting due diligence on a deal pipeline valued in excess of N54 billion which include projects such as renewable energy, agro-industrial parks, energy transition, power, healthcare, housing and hospitality.”

It was gathered that the N150 billion infrastructure fund is sponsored by United Capital, while UCAML is the manager, with Africa Finance Corporation (AFC) as the independent financial advisor to provide additional layers of best practice of corporate governance which enhances the project appraisal and due diligence activities of the fund management team.

The United Capital infrastructure fund is coming a few months after Stanbic IBTC launched a N100 billion infrastructure fund aimed to finance some projects that could generate income for investors.

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