UK-backed InfraCredit targets $17.7 million for infrastructure projects in Nigeria

Nigeria’s infrastructure financing landscape received a major boost as InfraCredit, the country’s only domestic credit guarantee institution, secured $17.7 million in new equity through its listing on the National Association of Securities Dealers’s Over-The-Counter (NASD OTC) exchange.

The move, strongly backed by the United Kingdom government, is poised to accelerate sustainable infrastructure development and support Nigeria’s ongoing energy transition.

The UK Government, through its Mobilising Institutional Capital Through Listed Product Structures (MOBILIST) programme, has invested NGN9.5 billion ($6 million) into InfraCredit.

This investment is part of a broader NGN64 billion ($41 million) listing on the NASD, underscoring a concerted effort to unlock domestic institutional capital for critical infrastructure projects across Nigeria.

According to a statement by the British High Commission on Monday, Nigeria faces a daunting infrastructure financing requirement estimated at over $2.3 trillion between 2021 and 2043.

“With local banks unable to provide the long-term funding needed, InfraCredit has emerged as a vital player by offering Naira-denominated guarantees that mitigate risk and enhance the credit quality of infrastructure bonds.

“These guarantees make it possible for local institutional investors such as pension funds and insurance companies to confidently invest in infrastructure projects”, the statement read.

Read also: EU commits €258m to tackle humanitarian crises in Africa

It further noted that to date, InfraCredit had enabled a pipeline of projects worth over NGN750 billion ($500 million) using its risk guarantees. With fresh equity from this listing, including investments from two domestic pension funds, InfraCredit is now positioned to scale up its support for additional infrastructure projects.

“The listing also signals a major shift toward a more transparent and inclusive capital market environment, as InfraCredit transitions into a publicly listed entity.

“As part of its long-term strategy, the company plans to pursue a future listing on the Nigerian Exchange (NGX).

“This aligns with MOBILIST’s earlier partnership with NGX to support products that drive the United Nations Sustainable Development Goals (SDGs)”, the statement added.

Speaking on the development, Jonny Baxter, British Deputy High Commissioner in Lagos, hailed InfraCredit’s listing as a testament to the enduring partnership between the UK and Nigeria in fostering long-term infrastructure solutions.

“InfraCredit’s success highlights the power and impact of long-term partnerships. The UK, through the FCDO, is proud to have been part of InfraCredit’s journey from inception via PIDG to this growth milestone.

“Listing with MOBILIST’s backing shows how public markets can mobilise domestic capital at scale. Nigerian institutional investors can now tap into infrastructure opportunities in their own economy, while helping fund the capital needs of local developers”, Baxter said.

Chinua Azubike, InfraCredit’s CEO, described the listing as a pivotal milestone in the company’s growth and a strong signal of investor confidence in its mission.

“This moment marks the beginning of a new chapter for InfraCredit. We’re excited about our transition into a listed public company, supported by new domestic institutional shareholders and the UK Government through MOBILIST.

“It demonstrates our commitment to deepening Nigeria’s capital markets and unlocking long-term, local currency infrastructure finance.

“By widening our ownership and embracing public market standards, we aim to build trust and create long-term impact for sustainable infrastructure financing”, Azubike said.

According to the Commission, founded in 2017 by GuarantCo (a PIDG company) and the Nigerian Sovereign Investment Authority (NSIA), InfraCredit was designed to develop Nigeria’s domestic debt capital markets and enable long-term financing of infrastructure.

“Since then, it has served as a model replicated in other countries, with similar entities like InfraZamin in Pakistan and Dhamana in Kenya.

“InfraCo Africa, another PIDG company, joined as an investor in 2020, further strengthening InfraCredit’s capital base.

“The institution also enjoys strategic partnerships with British International Investment (BII) and Financial Sector Deepening Africa (FSDA), both UK-backed entities focused on development finance”, the Commission noted.