The UK supports InfraCredit by investing N9.5 billion to advance sustainable infrastructure in Nigeria

The UK’s MOBILIST invests N9.5 billion in InfraCredit to unleash long-term domestic capital and strengthen Nigeria’s infrastructure financing.

To assist Nigeria in raising additional domestic funds for the development of sustainable infrastructure and the nation’s energy transition, the UK is employing catalytic investment.

Nigeria’s first and only domestic creditor guarantor, InfraCredit, is receiving N9.5 billion ($6 million) from the UK government’s MOBILIST initiative in order to facilitate the company’s listing on the country’s NASD OTC Exchange Plc (NASD).

InfraCredit has raised N27 billion ($17.7 million) in fresh stock, contributing to the listing’s total value of N64 billion ($41 million). 

According to the Nigerian government, more than $2.3 trillion will be required between 2021 and 2043 to bridge the massive infrastructure gap in the nation; yet, the local banking industry does not have the long-term capital required. In order to help investors reduce risk and enhance the creditworthiness of Nigerian infrastructure debt instruments, InfraCredit offers guarantees denominated in Naira. 

These guarantees draw in institutional investors from Nigeria, such as insurance companies and pension funds, and allow them to purchase instruments used to fund infrastructure projects.

Using guarantees, InfraCredit has secured a pipeline of infrastructure projects worth over N750 billion ($500 million). But now that it has been listed on the NASD with MOBILIST’s support, it has drawn direct equity investment from two pension funds, allowing it to increase its capacity and provide even more assurances for new projects. 

The investment from MOBILIST will also help InfraCredit’s green growth plan, which aims to shift the company’s portfolio toward more investments in renewable energy sources.

In order to fulfill its expansion goals, InfraCredit plans to investigate listing on the Nigerian Exchange (NGX). Prior to this, MOBILIST announced a collaboration with NGX to facilitate more investment in the pursuit of the Sustainable Development Goals (SDGs) of the UN through listed products. This collaboration is a component of the UK’s ongoing efforts to assist Nigeria in growing its capital market.

Mr. Jonny Baxter, the British Deputy High Commissioner in Lagos, stated in his remarks: “The success of InfraCredit demonstrates the strength and influence of long-term collaborations, and the UK, through the Foreign Commonwealth and Development Office (FCDO), is proud to have contributed significantly to both the establishment of InfraCredit through the Private Infrastructure Development Group (PIDG) and its ongoing expansion. This transaction serves as an example of how public markets may mobilize domestic money on a large scale. InfraCredit’s listing with MOBILIST’s support will allow local institutional investors to take advantage of the expansion prospects that sustainable infrastructure development offers in their own market, all the while guaranteeing that the local companies spearheading these initiatives can obtain the funding they require.

According to Mr. Chinua Azubike, CEO of InfraCredit, “This moment marks the beginning of a new chapter for InfraCredit.” Our move to become a publicly traded company with access to equity capital markets and the trust shown in us by our new domestic institutional investor shareholders and the UK Government through MOBILIST are both reasons for great satisfaction. This demonstrates our goal to unleash long-term local currency infrastructure finance by creating a more comprehensive and inclusive capital market for domestic resources that speeds up the construction of infrastructure in Nigeria. InfraCredit hopes to make a lasting impression by enhancing investor confidence as a reliable source of sustainable infrastructure funding as we proceed on our path to expansion and scale by increasing our ownership and abiding by public market norms.

The Nigerian Sovereign Investment Authority (NSIA) and GuarantCo, a Private Infrastructure Development Group (PIDG) company, founded InfraCredit in 2017 with the goal of expanding local debt capital markets for infrastructure finance and opening up long-term infrastructure financing in Nigeria. In other nations, such as Dhamana in Kenya and InfraZamin in Pakistan, it was the first of several such organizations. In 2020, InfraCo Africa, another PIDG company, joined the investment. Since then, British International Investment (BII) and Financial Sector Deepening Africa (FSDA), two UK organizations, have partnered with InfraCredit to provide finance.