GuarantCo, a member of the Private Infrastructure Development Group (PIDG), has provided a N20.23 billion (USD 25 million) counter-guarantee with a twenty-year tenor to Lagos Free Zone Company (LFZC).
This was contained in a press release made available to Nairametrics.
According to the statement, the counter-guarantee will support LFZC’s three guaranteed infrastructure bond issuances totalling N53 billion (USD 65.5 million).
The counter-guarantee is part of a larger guarantee facility fronted by Infrastructure Credit Guarantee Company Limited (InfraCredit) Nigeria to support the bond program.
Financing development
The funds raised through the bond issuance will be used to finance the continued development of the Lagos Free Zone (the Zone), which is being as the largest integrated port-based economic zone in Nigeria.
The Zone is envisioned to serve as an industrial and maritime hub for Nigeria and West Africa.
What the stakeholders said
Speaking on the transaction, the Chief Finance Officer of Lagos Free Zone, Ashish Khemka, said:
- “We value our partnership with GuarantCo and Infracredit towards the common goal of realizing enabling infrastructure projects in emerging markets like Nigeria.
- Lagos Free Zone and Lekki Port projects are a testament to our commitment to changing the paradigm of the ease of doing business in Nigeria, and we appreciate the critical role played by credit guarantee programs run by GuarantCo and Infracredit in enabling our access to long-term credit required for such projects.”
Layth Al-Falaki, CEO of GuarantCo, said:
- “We are delighted to have counter-guaranteed the bond issuance of Lagos Free Zone Company to the benefit of the economy and local people in Nigeria and West Africa.
- This is also our first joint transaction with InfraCredit, which we and the Nigerian Sovereign Investment Authority helped set up in 2017.
- We are very happy to see the progress that InfraCredit Nigeria has made in the past six years and this joint transaction will be an important pathfinder for GuarantCo’s relationships with other local Credit Enhancement Facilities, including InfraZamin in Pakistan and others in the pipeline, that our parent company PIDG, with the support of its companies, has or is planning to set up.”
Chinua Azubike, CEO of InfraCredit, said:
- “One of the key strategies of InfraCredit towards addressing the significant infrastructure financing deficit in Nigeria is to expand our guarantee capacity through risk-sharing partnerships with development finance institutions, by leveraging their capacity to share our long-term risks.
- The Counter-Guarantee provided by GuarantCo to support the Lagos Free Zone Company will strengthen our capacity to underwrite larger infrastructure projects and mobilise more domestic credit from local institutional investors to support impactful infrastructure projects in Nigeria that will support more jobs and accelerate economic growth.”
