Five things to know about Nigeria Infrastructure Debt Fund

The Nigeria Infrastructure Debt Fund (NIDF), the first listed infrastructure debt fund in the country, has recorded a 12 percent increase in the amount of value an investor earns when all distributions are reinvested.

NIDF’s total return stood at a value of 264.7 percent in the third quarter of 2023, up from 236.5 percent in 2022, which implies the amount of value an investor earns when all distributions are reinvested increased during the period.

“NIDF continues to consistently outperform its benchmark: the 10-year FGN bond. The loans are typically priced at 300-450bps over the benchmark on a floating rate basis,” NIDF said in its quarterly investor report.

The NIDF’s profit after tax surged to N10.58 billion in the first nine months of this year from N7.15 billion in the same period of 2022, while total income increased to N11.87 billion from N8.22 billion.

Here are five things to know about the fund:

First naira-denominated infrastructure fund listed on NGX

NIDF has been listed on the Nigerian Exchange Limited (NGX) as the first local currency-denominated infrastructure investment trust fund in Nigeria and Sub-Saharan Africa.

The listing, which took place on October 5, was commemorated with a closing gong ceremony where the management of the NIDF engaged market stakeholders with a Facts Behind the Listing presentation.

Read also: Nigeria Infrastructure Debt Fund announces N4.4 distribution

On that day, the NIDF successfully listed 853,817,592 units at N108.39 apiece on the main board of the NGX. The listing of NIDF units added a total of N92.54 billion to the market capitalisation of the NGX, further advancing the diversification of asset classes in the Nigerian capital market.

The NIDF is a N200 billion public infrastructure investment fund managed by Chapel Hill Denham. The fund, backed by major institutional investors, including the Nigeria Sovereign Investment Authority, has provided long-term financing in naira for private infrastructure projects. Since its inception, it has returned 155 percent.

Portfolio

The NIDF has a diversified portfolio of 27 investments as of September 30, 2023.

The infrastructure loan portfolio had a weighted average annualised yield of 18.5 percent, weighted average tenor at the disbursement of 8.8 years, and weighted average remaining life of 4.9 years.

Investments

Two new infrastructure loans totalling N5.84 billion were approved by the Investment Committee of the Fund in Q3 2023.

“The loans will be disbursed on execution of definitive documentation and compliance with disbursement conditions by the borrowers,” it said.

“In addition, the Investment Committee also granted preliminary approval for two new infrastructure loans totalling N12.3 billion. These are currently undergoing due diligence.”

Fund distribution

The fund announced a quarterly distribution for the reporting period which is N3.81 per unit on October 9, with a qualification date of October 16, 2023.

“This distribution was paid to eligible unitholders on October 20, 2023, and was fully funded from the cash inflows generated by the Fund during the quarter,” it said.

NIDF to finance Tizeti Network

Tizeti Network Limited, a West African internet service provider, has secured a long-term financing agreement from Chapel Hill Denham’s NIDF.

Read also: The $1.35 billion project funding for Lagos

The financing will be deployed in the expansion of Tizeti’s broadband network across 15 states in Nigeria.

Tizeti currently serves over 3 million subscribers in Nigeria (residential facilities, businesses, and hotspot users), via its wide network of solar-powered base stations in five states. It provides unlimited data usage and streaming.

The company will deploy the debt funding to build new internet infrastructure and purchase additional equipment to expand its services to Delta, Akwa Ibom, Cross River, Abia, Anambra, Imo, Enugu, Abuja, Kano, and Kaduna.