InfraCredit, a ‘AAA’ rated specialised infrastructure credit guarantee institution, is pleased to announce the successful completion of a US$15 million subordinated unsecured 10-year facility with the African Development Bank Group (AfDB).
This strategic partnership marks the second investment by AfDB in InfraCredit, following an initial US$10 million facility in 2020.
Specifically, the US$15 million facility strengthens InfraCredit’s capital base and supports its mission to bridge Nigeria’s infrastructure financing gap. The facility will boost private sector financing for critical infrastructure projects across sectors such as power, renewable energy, telecommunications, healthcare, green housing, and transportation. Following this facility investment, InfraCredit’s funded capital base will increase to $187m (c. N264 billion).
Mr. Lamin Barrow, Director General, African Development Bank Group, expressed the Bank’s satisfaction with this operation, and at the time of the signing ceremony of the facility, said. “Our support to institutions such as InfraCredit clearly demonstrates the importance of promoting innovative and scalable solutions to leverage pools of capital from domestic institutional investors, and position local capital markets as viable alternative sources of long-term funding to bridge the continent’s huge infrastructure deficit.”
This investment by AfDB underscores its confidence in InfraCredit’s robust business fundamentals and commitment to sustainable development. By leveraging domestic capital markets, InfraCredit aims to deepen the local debt capital market, attracting long-term investors and fostering economic growth.
This investment aligns with AfDB’s support for InfraCredit’s Clean Energy Transition Strategy and Roadmap, as well as InfraCredit’s green finance achievements. It reflects AfDB’s commitment to promoting low-carbon development and climate mitigation by leveraging private sector climate finance.
Over the past 7 years, InfraCredit’s guarantees have facilitated access to NGN 218 billion (US$ 445 million) in local currency finance for 12 first-time issuers and over 20 infrastructure projects. InfraCredit’s support enabled Nigeria’s first 15-year green infrastructure bond and extended corporate bond tenors beyond market norms to 20 years.
According to the Chief Executive Officer of InfraCredit, Chinua Azubike, “We are delighted by AfDB’s confidence in our business model, which has successfully facilitated private sector investment in impactful infrastructure projects and InfraCredit’s clean energy roadmap that has accelerated green finance for climate-aligned infrastructure, fostering SME growth, job creation, sustainable energy access, and overall economic development. Despite challenging market conditions, we have consistently demonstrated strong fundamentals, solid portfolio performance, a proven track record, and profitability.
The further expansion of our capital base by this facility will bolster our ability to support access to long-term local currency domestic credit for our rapidly growing pipeline of infrastructure projects currently worth over NGN 839billion (US$ 579million), fostering job creation and economic growth.”
“The African Development Bank is pleased to be providing additional capital to InfraCredit Nigeria. The success of InfraCredit has inspired the replication of its business model across the continent, a key part of our strategy for scaling up private sector financing in Africa. This is evidenced by our support for the establishment of a similar institution in Kenya covering the East Africa region.”, added Mr. Solomon Quaynor, Vice President for Private Sector, Infrastructure an Industrialization at the African Development Bank Group.
About InfraCredit
InfraCredit is a ‘AAA’ rated specialised infrastructure credit guarantee institution backed by the Nigeria Sovereign Investment Authority, GuarantCo, InfraCo Africa (Private Infrastructure Development Group companies), KfW Development Bank, Africa Finance Corporation, African Development Bank, and domestic institutional investors – Leadway Assurance Company Limited and Aiico Insurance Plc, to provide local currency guarantees and mobilize 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, and international rating agency, Fitch Ratings.
InfraCredit’s guarantees promote
(i) financial inclusion, by bringing first-time borrowers to the domestic bond market
(ii) financial deepening, by extending bond tenors for corporates, and by broadening bond investor bases
(iii) financial innovation, by introducing new fixed income instruments such as green bonds
InfraCredit is a Harvard Business School (HBS) Case Study and has been part of the HBS Curriculum for first-year MBA students since 2018.
About the African Development Bank Group
The African Development Bank Group (AfDB) is Africa’s premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 34 African countries with an external office in Japan, the AfDB contributes to the economic development and the social progress of its 54 regional member states. For more information: www.afdb.org
African Development Bank Group
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