AIICO Insurance Plc has been admitted as the second private domestic institutional investor in InfraCredit, following Leadway Assurance Plc’s initial involvement.
According to the press release announcing the move, AIICO’s investment represents 5% of the institution’s share capital.
This strategic move propelled InfraCredit’s paid-in capital base to $175.14 million (N148.55 billion), consequently elevating the institution’s credit guarantee capacity to an impressive $875.7 million (N742.77 billion).
What they are saying
Commenting on the deal, AIICO Insurance’s CEO, Babatunde Fajemirokun noted that over the years, AIICO Insurance had invested in InfraCredit guaranteed bonds, as well as other financing arrangements promoted by the institution.
He said,
- “Over the past two years, AIICO Insurance has invested in InfraCredit guaranteed bonds, and participated in novel financing arrangements promoted by the company to bring infrastructure investment to areas that have been significantly underserved.”
Chairman of InfraCredit’s Board of Directors, Sanjeev Gupta, speaking on the deal, noted that the move was part of the drive to increase private sector involvement in InfraCredit’s ownership structure.
He noted,
- “This investment marks another significant turning point and a significant milestone for InfraCredit, as we aim to increase private sector involvement in the ownership structure.”
Backstory
InfraCredit is an AAA-rated specialized infrastructure credit guarantee institution.
The institution draws support from key financial entities like the Nigeria Sovereign Investment Authority, GuarantCo,
InfraCo Africa (Private Infrastructure Development Group companies), KfW Development Bank, Africa Finance Corporation, and the African Development Bank.
Essentially, InfraCredit mobilizes long-term funding for infrastructure projects within Nigeria. By assuming the role of a catalyst, the institution entices local currency credit from varied sources such as pension funds, insurance firms, and other long-term investors for infrastructure projects.
InfraCredit currently guarantees credit for infrastructure projects across Nigeria, ranging from:
- N8.5 billion credit guarantee for North South Power (operators of Shiroro hydroelectric power plant).
- N20 billion counter-guarantee for Lagos Free Zone Company
- N13 billion credit guarantee for GEL Utility Limited, operators of Port Harcourt refinery’s power plant, among others.
Speaking on the admittance of AIICO Insurance as an investor, Chinua Azubike, the CEO of InfraCredit noted,
- “AIICO’s equity investment further strengthens our core capital base and expands our guarantee capacity as we continue to act as a catalyst to attract domestic credit from pension funds, insurance firms and other long-term institutional investors into credit-worthy infrastructure projects.”
