By Adedapo Adesanya
African Development Bank (AfDB) and Infrastructure Credit Guarantee Company Limited (InfraCredit) have signed an agreement for a $15 million subordinated loan to strengthen InfraCredit’s capital base and attract institutional investors’ resources to help close Nigeria’s infrastructure financing gap.
According to a statement, Mr Lamin Barrow, Director General of AfDB’s Nigeria Country Department, and Mr Chinua Azubike, CEO of InfraCredit, signed the agreement in Lagos on June 14, 2024.
The facility will boost InfraCredit’s efforts to unlock additional long-term local currency financing through the capital markets for infrastructure projects, primarily by leveraging pools of capital from pension funds and other institutional investors in Nigeria.
The partnership is part of AfDB’s current country strategy to stimulate local currency bond market financing across key infrastructure sectors and enhance economic diversification and competitiveness in Nigeria.
As a company, InfraCredit specializes in mobilising long-term capital from institutional investors to support infrastructure projects, including green and climate-aligned developments.
Speaking on this, Mr Barrow expressed the bank’s satisfaction with this operation.
“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,” he stated.
In his comments, Mr Azubike said, “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 ($430 million), fostering job creation and economic growth.”
Adding his input, Mr Solomon Quaynor, AfDB’s Vice President for Private Sector, Infrastructure and Industrialization stated, “AfDB is pleased to be providing additional capital to InfraCredit Nigeria. The success of InfraCredit has inspired the replication of its business model across the continent, a key part of our strategy for scaling up private sector financing in Africa. This is evidenced by our support for the establishment of a similar institution in Kenya covering the East Africa region.”
