AfDB, InfraCredit sign $15m deal to address infrastructure deficit in Nigeria

The African Development Bank (AfDB) and Infrastructure Credit Guarantee Company Limited have signed an agreement for a $15 million subordinated loan facility to strengthen InfraCredit’s capital base and attract institutional investors’ resources to help close Nigeria’s infrastructure financing gap.

The Board of Directors of AfDB approved the loan last year May 2023 but the deal was signed by Lamin Barrow, Director General of the African Development Bank’s Nigeria Country Department, and Chinua Azubike, CEO of InfraCredit, in Lagos on 14 June 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 the West African country.

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.”

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Reacting to the deal, Azubike said, “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 and InfraCredit’s clean energy roadmap that 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 African Development Bank Group, stated, “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.”

The partnership advances several strategic objectives under the Bank’s current country strategy for Nigeria, including stimulating local currency bond market financing across key infrastructure sectors and enhancing economic diversification and competitiveness.

By: Babajide Okeowo

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