InfraCredit featured at WEF as case study solution for Clean Energy Investments mobilisation

InfraCredit has been featured by the World Economic Forum (WEF) as a case study solution in its community paper on ‘Mobilising Investments for Clean Energy in Nigeria’. The community paper is published by the WEF in partnership with the Renewable Energy & Energy Efficiency Associations Alliance (REEEA-A) and Marsh.

Inaugurated at the Nigeria Country Roundtable on May 2, 2023, the WEF community paper summarises key insights and recommendations on Nigeria’s priority areas and possible solutions to address investment challenges.

The case study highlights InfraCredit’s unique role in mobilising long-term funding for clean energy projects with local currency to enable the growth of community-based developers in Nigeria.

The paper also spotlights InfraCredit’s Clean Energy Funding Programme, under which we supported the credit enhancement of Darway Coast’s green debt issue for solar mini-grid rural electrification and the North South Power Company’s green bond issue for a hydropower plant in Nigeria.

According to WEF in the community paper, InfraCredit, as part of its clean energy transition strategy, has developed a Clean Energy Funding Programme (CEFP) that seeks to aggregate, de-risk and unlock domestic institutional investments to support eligible clean energy projects in Nigeria to contribute to meeting Nigeria’s universal electrification goal by 2030 and the Sustainable Development Goal (SDG) 7 target of ensuring access to affordable, reliable, sustainable and modern energy for all, while putting Nigeria on a path to achieve net-zero emissions by 2060.

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It further stated that, “Under the CEFP, InfraCredit has originated a project pipeline of over $180.7 million (NGN Equivalent) that requires the mobilisation of at least NGN41.6 billion ($90 million) of private domestic institutional capital. One example is the support of the credit enhancement of Darway Coast Nigeria’s green debt issue. The project was financed through a blended instrument, with the facility enabling a 7-year fixed-rate local currency debt financing for the project by investing in the subordinated debt tranche, making it the first-ever certified blended local currency green debt issue for a solar mini-grid project in Nigeria. An additional example is the North South Power Company (NSP)’s green bond issue for the 600-MW Shiroro Hydro power plant in Niger State.”

“In February 2019, InfraCredit guaranteed NSP’s NGN8.5 billion, 15-year corporate infrastructure green bond, which was the longest local currency green debt issue in sub-Saharan Africa at the time. Leveraging its historical track record from the first issue supported by InfraCredit’s guarantee in 2019, NSP established a credit history, built investor confidence and subsequently, in 2020, issued another NGN6.2 billion corporate infrastructure bond without the need for a guarantee, attracting seven local pension funds,” WEF added in the paper.

Commenting, Chinua Azubike, Chief Executive Officer, InfraCredit said: “At InfraCredit, we recognise that our role in mobilising domestic institutional investment and promoting the use of long-term local currency-denominated finance to meet the country’s infrastructure development needs could become an effective investment tool to collaborate with development partners in promoting green growth and climate resilient development.”

InfraCredit, which is an AAA-rated specialised financial guarantor, sponsored and backed by the Nigeria Sovereign Investment Authority, GuarantCo, KfW, Africa Finance Corporation, African Development Bank and InfraCo Africa, has a mandate to act as a catalyst and deepen Nigeria’s domestic debt capital markets for infrastructure finance.

It has over the past six years, through its guarantees, InfraCredit facilitated first-time access to local currency debt finance with up to a 20-year tenor from the domestic bond market for infrastructure projects totalling NGN145 billion ($315 million).