InfraCredit, an ‘AAA”(NG) rated specialised infrastructure credit guarantee institution in Nigeria and the Agence Française de Développement (AFD), the development agency of the French government and the main implementing agency for France’s official development assistance, have signed a Technical Assistance Financing Agreement. Under the latter, AFD will provide project preparation and development technical assistance support for InfraCredit’s prospective pipeline of public-private partnership (PPP) projects in selected state governments that require support to improve their bankability and attract private sector participation. Thus, it will enable them reach financial close and access long-term local currency financing from the domestic debt capital markets.
The successful implementation of the project will support eligible projects with technical, legal and feasibility studies for PPP projects to be selected in agreement between InfraCredit and AFD. This will enable eligible sub-national infrastructure projects reach financial close, support new job creation, and enable more capital markets instruments to be issued to institutional investors.
InfraCredit’s Annuity PPP Guarantee was developed to facilitate the sustainable financing of new infrastructure projects alongside subnational governments in Nigeria. It is done through technical assistance and catalytic capital to accelerate state-supported and private sector-led development of bankable, revenue-generating infrastructure projects under design, build, finance, operate and maintain (“DBFOM”) arrangements by the private partner, supported by a transitional annuity revenue assurance by the state government to be replenished from the future cash flows generated from the project. Such eligible projects could benefit from InfraCredit’s guarantee which can mobilise up to 20-year local currency financing from the domestic debt capital markets.
As a result, additional finance is unlocked, reaching critical sectors most in need, supporting new viable infrastructure that will have an impact: job creation, poverty reduction, protection of the environment and local economic growth.
Speaking on the Agreement with AFD, the Chief Executive Officer of InfraCredit, Chinua Azubike, stated that “To date, InfraCredit’s guarantees have enabled the issuance of up to USD266 Million (NGN Equivalent) of local currency infrastructure bonds, of which 61% include PPP projects, however an increasing pipeline of sub-national infrastructure projects require project preparatory support to deliver well-structured bankable projects that can access the debt capital markets, our collaboration with AFD through technical assistance support will enable state governments adopt new funding tools and PPP models that will attract and retain private sector’s financial incentive to invest in viable infrastructure projects. AFD’s technical assistance funding will enable InfraCredit build deal pipelines of well-prepared state government-supported and private sector-led infrastructure projects to be executed under InfraCredit’s Annuity PPP guarantee product”.
Speaking on the Agreement entered into with InfraCredit, Xavier Muron, the Country Director of AFD in Nigeria, noted that: “This €600,000 grant to Infracredit will finance studies for future infrastructure projects through public-private partnerships throughout Nigeria. Ultimately, it aims at mobilising further the private sector in PPP infrastructure projects.”
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Infrastructure Credit Guarantee Company Limited
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Guarantee Enquiries: firstname.lastname@example.org
Phone: +234 6312300
Agence Française de Développement (AFD),
BLAIZOT Élise – Project Officer, Financial Sector – Public Sector – Governance
Mobile: +234 703 249 4771
InfraCredit is a ‘AAA’(NG) rated specialised infrastructure credit guarantee institution backed by the Nigeria Sovereign Investment Authority, GuarantCo (a Private Infrastructure Development Group company), KfW Development Bank, Africa Finance Corporation, InfraCo Africa and African Development Bank, to provide local currency guarantees and mobilise long term debt financing for infrastructure in Nigeria. InfraCredit’s guarantees act as a catalyst to attract domestic credit from pension funds, insurance firms and other long-term investors into credit-worthy infrastructure projects, thereby deepening the Nigerian debt capital markets. InfraCredit operates on a commercial basis with a developmental role and benefits from private sector governance.
InfraCredit maintains the highest domestic financial strength ratings accorded to any financial institution by Agusto and Co. and Global Credit Ratings Co., two of the major domestic credit rating agencies.
The Agence Française de Développement (AFD) funds, supports, and accelerates the transitions to a fairer and more sustainable world – aligned on the Sustainable Development Goals. Focusing on climate, biodiversity, peace, education, urban development, health and governance, our teams carry out more than 4,000 projects in France’s overseas departments and territories and another 115 countries. In this way, we contribute to the commitment of France and French people to support the sustainable development goals.
It is present in Nigeria since 2008 with its main office based in Abuja along with an additional branch in Lagos. Its main sectors of intervention in the country are energy, high education, agriculture, water along with support to civil society organisations.