African Development Bank Approves $15m million investment package to Infrastructure Credit Guarantee Company

According to The Daily Independent, The Board of the African Development Bank (AfDB) has approved a $15 million investment package to Infrastructure Credit Guarantee Company (InfraCredit), to support infrastructure financing through the domestic debt capital markets in Nigeria.

The investment package to InfraCredit is comprised of a subordinated loan of $10 million and a risk sharing facility of up to $5 million.

This intervention will promote local currency infrastructure financing, and further development of the domestic capital market.

 

InfraCredit is a specialized infrastructure credit guarantee company, established to enhance local currency debt instruments – mainly bonds, to finance eligible infrastructure projects in Nigeria.

This is intended to uplift the credit rating of such bonds, allowing institutional investors to include them in their portfolios.

 

The African Development Bank’s investment in InfraCredit will boost local institutional investor funds, including pension funds, into financing long-term infrastructure projects, helping to stimulate local currency financing across diverse infrastructure transactions, thereby improving economic diversification and competitiveness, as well as promoting more equitable growth, strengthening local value chains and financial markets in Nigeria.

 

Akinwumi "Akin" Adesina, the President of the African Development Bank who previously served as Nigeria's Minister of Agriculture and Rural Development, and In 2015, elected as the President of the African Development Bank, tweeted :


 "It was a great honor and pleasure to meet with H.E. President today at State House, Abuja. I deeply appreciate your strong personal support Mr. President. You can count on me and the African Development Bank for Nigeria!"

Stefan Nalletamby, the Bank’s Director of the Financial Sector Development said:

“The Bank’s support will strengthen the capital base of InfraCredit, underpinning the expansion of the Company’s core business of guaranteeing of bonds issued to fund infrastructure projects.

This adds to the Bank’s existing initiatives to mobilize domestic institutional savings and stimulate non-sovereign local debt capital market development in Nigeria.This ultimately helps to increase private sector financing for critical infrastructure projects in key sectors including energy, agriculture, water, health and education, through local capital markets.”