InfraCredit, a ‘AAA’ rated specialised infrastructure credit guarantee institution, has successfully completed a $15 million subordinated unsecured 10-year facility with the African Development Bank Group (AfDB). This marks AfDB’s second investment in InfraCredit, following a $10 million facility in 2020.
The $15 million facility aims to strengthen InfraCredit’s capital base and support its mission to bridge Nigeria’s infrastructure financing gap. This funding will enhance private sector financing for critical infrastructure projects across sectors such as power, renewable energy, telecommunications, healthcare, green housing, and transportation. As a result, InfraCredit’s funded capital base will increase to $187 million (approximately N264 billion).
Mr. Lamin Barrow, Director General of the AfDB Group, expressed satisfaction with this operation. At the signing ceremony, he stated, “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. This positions local capital markets as viable alternative sources of long-term funding to bridge the continent’s huge infrastructure deficit.”
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The investment underscores AfDB’s confidence in InfraCredit’s robust business fundamentals and commitment to sustainable development. By leveraging domestic capital markets, InfraCredit aims to deepen the local debt capital market, attract long-term investors, and foster economic growth. This investment aligns with AfDB’s support for InfraCredit’s Clean Energy Transition Strategy and Roadmap, as well as its green finance achievements. It reflects AfDB’s commitment to promoting low-carbon development and climate mitigation by leveraging private sector climate finance.
Over the past seven years, InfraCredit’s guarantees have facilitated access to NGN 218 billion ($445 million) in local currency finance for 12 first-time issuers and over 20 infrastructure projects. InfraCredit supported Nigeria’s first 15-year green infrastructure bond and extended corporate bond tenors to 20 years, beyond market norms.
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InfraCredit’s CEO, Chinua Azubike, commented, “We are delighted by AfDB’s confidence in our business model, which has successfully facilitated private sector investment in impactful infrastructure projects. Despite challenging market conditions, we have demonstrated strong fundamentals, solid portfolio performance, and profitability.”
The additional capital from AfDB will bolster InfraCredit’s ability to support access to long-term local currency domestic credit for its rapidly growing pipeline of infrastructure projects, currently worth over NGN 839 billion ($579 million). This will foster job creation and economic growth in Nigeria.
Mr. Solomon Quaynor, AfDB’s Vice President for Private Sector, Infrastructure, and Industrialization, added, “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 establishing a similar institution in Kenya covering the East Africa region.”
