LAGOS/Nigeria: The African Development Bank (AfDB) and Infrastructure Credit Guarantee Company Limited (InfraCredit) have entered into a pivotal agreement, securing a $15 million subordinated loan facility aimed at reinforcing InfraCredit’s capital base. This move is set to attract institutional investors and address Nigeria’s significant infrastructure financing gap.
The agreement was formalized on June 14, 2024, with Lamin Barrow, Director General of the AfDB’s Nigeria Country Department, and Chinua Azubike, CEO of InfraCredit, signing the documents in Lagos.
The loan facility is designed to enhance InfraCredit’s ability to unlock additional long-term local currency financing through the capital markets, primarily by leveraging pools of capital from pension funds and other institutional investors in Nigeria.
InfraCredit, a specialized Nigerian credit guarantee company, mobilizes long-term capital from institutional investors to support infrastructure projects, including those aligned with green and climate initiatives.
Barrow emphasized the significance of this operation for the AfDB, stating, “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 the local capital market as a viable alternative source of long-term funding to bridge the continent’s huge infrastructure deficit.”
Azubike highlighted InfraCredit’s achievements and the confidence placed in them by the AfDB, saying, “We are delighted by the African Development Bank’s confidence in our business model, which has successfully facilitated private sector investment in impactful infrastructure projects. InfraCredit’s clean energy roadmap 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 NGN 625 billion (US$ 430 million), fostering job creation and economic growth.”
Solomon Quaynor, Vice President for Private Sector, Infrastructure, and Industrialization of the AfDB Group, also expressed the Bank’s commitment, stating, “The African Development Bank 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.”
This partnership aligns with several strategic objectives under the AfDB’s current country strategy for Nigeria, including stimulating local currency bond market financing across key infrastructure sectors and enhancing economic diversification and competitiveness.
