Infrastructure Credit Guarantee Company Plc (InfraCredit) has received a $50 million subordinated unsecured loan for 10 years from the International Finance Corporation (IFC), which is part of the World Bank Group. This loan is meant to boost InfraCredit’s ability to fund infrastructure projects in Nigeria, according to a statement on Wednesday from InfraCredit, Nigeria's ‘AAA’-rated specialized infrastructure credit guarantee firm. IFC is a member of the World Bank Group and is the largest global development organization focused on private sector growth in developing markets.
The agreement includes a total committed amount of $50 million, which will be given in two parts of $25 million each. This loan will help improve InfraCredit’s capital structure, allowing it to support more infrastructure projects. It will also help raise long-term financing in local currency for sectors such as renewable energy, climate-smart agriculture, digital infrastructure, green growth, telecommunications, healthcare, transportation, and other important areas of Nigeria's economy.
Local funding for infrastructure
Chinua Azubike, the Chief Executive Officer of InfraCredit, mentioned that the IFC’s funding strengthens InfraCredit's ability to offer financial solutions and helps it gather long-term local funds for infrastructure. “Building additional institutional capacity has been an important priority for InfraCredit as our transaction pipeline grows and our financing solutions evolve,” Mr Azubike said. He added that this investment shows the international development finance community's ongoing trust in InfraCredit's business model.
He explained that the financial institution benefits from a strong network of development finance institutions and partners that support it in various ways, such as subordinated debt, risk-sharing measures, counter-guarantees, first-loss capital, and special investment facilities. “That breadth of support is a significant competitive advantage and reflects the maturity and resilience of our institution. We look forward to building on this partnership with IFC as we work together to expand the flow of long-term capital into Nigeria’s infrastructure market,” the InfraCredit CEO said.
Aliou Maiga, the IFC’s Financial Institutions Group (FIG) Director for Africa, stated that the investment in InfraCredit shows IFC’s commitment to improving Nigeria’s infrastructure financing system and attracting long-term private funds. “By supporting InfraCredit’s institutional capacity, we are helping mobilize domestic resources for infrastructure investments that can drive economic growth, job creation and sustainable development across key sectors of the Nigerian economy. We are pleased to deepen our partnership with InfraCredit as it continues to play a catalytic role in developing Nigeria’s local capital markets,” Mr Maiga said.
Institutional development
The deal not only has financial value but also marks the ongoing growth of InfraCredit’s institutional model and the strong support from development finance that backs its role in Nigeria’s infrastructure financing system. IFC joins a wide network of development finance institutions and partners that support InfraCredit with various forms of equity, subordinated debt, portfolio risk-sharing, counter-guarantees, first-loss capital, special financing facilities, and technical assistance.
The partnership has strengthened InfraCredit’s capital setup and financial leverage, boosting market innovation through co-financing and project development. It has increased its ability to attract local institutional funds for sustainable infrastructure.
Funding details
IFC’s investment comes from the International Development Association Private Sector Window (IDA PSW) Blended Finance Facility and the Concessional Capital Window. Since starting operations in 2017, InfraCredit has been essential in developing Nigeria’s local debt market by enabling unique transactions, extending corporate bond tenors, increasing institutional investor involvement, and proving that long-term, local currency infrastructure finance is viable.
The company has helped provide over NGN600 billion in long-term local currency financing across 28 infrastructure projects and has supported 14 first-time issuers in accessing Nigeria’s domestic debt market. InfraCredit-backed transactions have reached several market milestones, including Nigeria’s first 15-year green infrastructure bond and extending corporate bond tenors up to 20 years.
Also, its guaranteed infrastructure bonds have received strong interest from local institutional investors, including 20 out of Nigeria’s 25 Pension Fund Administrators, with many transactions seeing oversubscription. This facility builds on a period of growth for InfraCredit, following the increase of its local institutional shareholder base, its move to become a listed public company on the NASD OTC Securities Exchange, and the ongoing development of innovative financing solutions that support infrastructure projects at different stages.
InfraCredit stated that this facility highlights the important role of development finance institutions and local capital markets in promoting long-term local currency infrastructure finance. “By strengthening InfraCredit’s capital base and institutional capacity, the Facility will support continued market development while broadening the availability of long-term private capital for sustainable infrastructure across Nigeria,” the statement said.
Drop your comment
No comments yet — be the first to drop the gist 👇