• Friday, March 29, 2024
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Financial market system buoyed as Infracredit signs agreement with FSD Africa

Financial market system buoyed as Infracredit signs agreement with FSD Africa

Infracredit, a private company established by GuarantCo, and the Nigerian Sovereign Investment Authority have signed a technical assistance agreement with Financial Sector Deepening Africa (FSD Africa), a company funded by UK aid, to provide financing solutions to local currency infrastructure bonds.

The agreement’s main goal is to help infrastructure projects attain financial closure, encourage new job creation, and increase the number of capital markets instruments available to institutional investors.

According to Chinua Azubike, the Chief Executive Officer of InfraCredit, the agreement is to design well-structured projects that can access the debt capital market, as well as to develop innovative financial solutions that will speed up the issuance of creditworthy currency infrastructure to boost bonds to domestic institutional investors.

“Thus, our collaboration with FSD Africa through technical assistance support will also involve the design of an innovative financial solution that will catalyse more bankable climate-smart infrastructure projects for InfraCredit’s guarantees which will accelerate the issuance of creditworthy local currency infrastructure bonds to domestic institutional investors, thereby deepening the debt capital markets in Nigeria,” Azubike added.

Mark Napier, FSD Africa’s Chief Executive Officer, expressed his delight at the new agreement and assured that the firm would be able to provide technical assistance to aid in the design of a critical climate-focused infrastructure facility that will connect short-term greenfield capital with long-term capital markets funds.

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“Our partnership with InfraCredit intends to spur increased access to long-term finance and build financial sector resilience and environmental sustainability through local credit enhancement facilities (Guarantees) provided by InfraCredit,” Napier added.

InfraCredit Guarantee is a company that provides local currency guarantees in order to improve the credit quality of debt instruments issued to finance creditworthy infrastructure assets in Nigeria. It also serves as an incentive for attracting domestic credit from pension funds and insurance funds, thereby strengthening Nigeria’s debt capital markets.

The company has maintained the highest domestic financial strength rating, according to domestic credit rating agencies Augusto and Co. and Global Credit Rating Co., which can be seen from the mode of operation, which is commercial but with development roles and benefits from private sector governance.

FSD Africa is a specialised development organization dedicated to the development and strengthening of financial markets in Sub-Saharan Africa. FSD Africa is a Kenyan non-profit corporation limited by a guarantee, that is supported by UK government grants.

It’s programming aims to solve systemic difficulties in Africa’s financial markets, resulting in large-scale and long-term transformation and tackling the underlying structural causes of poverty through strengthening the financial market system’s operation.