InfraCredit, a ‘AAA’-rated specialised infrastructure credit guarantee institution has announced its guarantee of Craneburg EKSG Motorway (“Craneburg EKSG” or “the Company”) Company PLC’s NGN32.50 billion 20-Year Senior Guaranteed Fixed Rate Infrastructure Bonds Due 2045 (“the Bond”).
Craneburg EKSG is a special purpose concession company established by the project promoter – Craneburg Construction Company Limited (‘Craneburg”) for the purpose of funding and constructing, as well as the operation and maintenance of the 68km ring road in Ado Ekiti, Ekiti State under a design, build, finance, operate, maintain and transfer (DBFOM) concession 20-year arrangement (the “Project”).
Developed under a Public-Private Partnership (PPP) model, the Project leverages InfraCredit’s Guarantee, ensuring sustainable financing and long-term viability, and marks the first successful corporate infrastructure bond issuance for a Sub-national PPP Project, under InfraCredit’s Annuity PPP Guarantee Product.
The Project, which forms part of the Ado-Ekiti Transportation Master Plan, is aimed at improving connectivity, easing urban mobility, and boosting economic development within Ekiti State.
Furthermore, the Ekiti State Government (EKSG) intends to unlock economic activities within the Project corridor with the completion of key developments (e.g. Cargo Airport, the Agro-Industrial Processing Zone and Knowledge Zone, amongst others) that will induce additional traffic along the Project corridor, improving the road usage.
InfraCredit’s Annuity PPP Guarantee Product enables the sustainable financing of new infrastructure across sub-nationals in Nigeria, using technical assistance and project preparation to accelerate state supported and private sector led development of sustainable revenue generating infrastructure projects, under a design, build, finance, operate, and maintain (“DBFOM”) arrangement with the private sector.
With the support of InfraCredit’s guarantee, the Bond was accorded a ‘AAA’ long-term credit rating by Agusto & Co. and GCR, reflecting the high degree of creditworthiness and the robust quality of the Bond. The Bond issue, subscribed by seven (7) domestic pension funds, and other institutional investors, offers domestic investors a unique opportunity for diversified, “AAA”-rated assets with strong risk-adjusted returns.
The Bond proceeds will be used to finance the first phase of the project (construction, operation and maintenance of a ring road of approximately 17.84km around Ado Ekiti, Ekiti State); which includes the procurement and deployment of the tolling infrastructure as well as operational technology systems. In addition to supporting existing and future developments, the Project is expected to improve the quality of life for commuters by reducing travel time and minimizing accident risks associated with poor road conditions. The Project will create over 250 direct and 50 indirect jobs during construction, with an additional 31 jobs expected, post-construction. It also supports the United Nations Sustainable Development Goals: 1, 2, 5, 8, 9, 10, 11, and 12.
In a statement, the Chairman, Craneburg Construction Company, Mr. Femi Edun stated: “We are honoured by the trust placed in us by the Ekiti State Government to deliver this transformative project under the innovative InfraCredit Annuity PPP Product. The Product framework has been instrumental in mobilising long-term domestic capital that enables us to sustainably finance and execute this much-needed infrastructure project. As a company recognised for quality and timely delivery, we are committed to ensuring that this project sets a new benchmark for infrastructure development at the sub-national level.”
Commenting on this milestone project, the Commissioner of Finance, Ekiti State, Hon. Akintunde Oyebode stated that: “This milestone marks a bold shift in how states can attract private capital to drive inclusive development. The Ado-Ekiti Ring Road is not just a standalone project; it is a central part of our infrastructure master plan, designed to connect critical assets such as our airport, knowledge zones, and tertiary institutions. Through innovative partnerships like this, Ekiti State is demonstrating what is possible when government, investors, and technical partners work together to unlock long-term value and accelerate economic growth.”
According to the Chief Executive Officer of InfraCredit, Mr. Chinua Azubike, “Public-Private Partnerships (PPPs) leverage private sector expertise and capital to finance and manage revenue generating infrastructure projects, while domestic capital markets play a crucial role in providing long term financing for these partnerships, we are excited to have supported an innovative financing model under InfraCredit’s Annuity PPP Guarantee Product to unlock 20-year financing from domestic institutional investors for the concession company sponsored by Craneburg Construction under a Design, Build, Finance, Operate, and Maintain (DBFOM) model, leveraging technical assistance and project preparation to accelerate delivery and scale. The Ado-Ekiti Toll Road Project serves as a blueprint for how effective risk allocation between government and private sector can attract long-term private investment that creates jobs and drives inclusive growth.”
KfW Development Bank, through a Technical Assistance Financing Agreement (“TA Facility”) with InfraCredit, supported the project’s preparation and development from inception, enabling best practice processes for concessionaire selection. Under the TA Facility, InfraCredit procured a project development expert team in collaboration with the Ekiti State Development and Investment Promotion Agency (EKDIPA) to provide advisory services, including environmental studies, legal advice, as well as technical and commercial feasibility assessments, aimed at enhancing the project’s appeal and ensuring a successful financial close.
Anchoria Advisory Services Limited acted as Lead Issuing House/Bookrunner, and Coronation Merchant Bank and Greenwich Merchant Bank acted as Joint Issuing Houses and Bookrunners for the transaction.
