Infrastructure Credit Guarantee Company Plc (InfraCredit) has secured a $50 million subordinated debt facility from the International Finance Corporation (IFC) to expand its capacity to mobilise long-term local-currency financing for infrastructure projects in Nigeria.
The 10-year unsecured facility will be disbursed in two equal tranches of $25 million, according to InfraCredit.
The company said the facility would strengthen its capital structure and enable it to support a growing pipeline of infrastructure transactions across renewable energy, climate-smart agriculture, digital infrastructure, telecommunications, healthcare and transportation.
Unlike direct foreign-currency project lending, the facility is designed to strengthen InfraCredit’s ability to provide guarantees and other financing solutions that enable infrastructure companies to raise long-term funds from Nigeria’s domestic capital market.
The arrangement is particularly relevant to projects that generate revenue in naira, as borrowing in foreign currencies can expose such businesses to exchange-rate risks.
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IFC’s Financial Institutions Group Director for Africa, Aliou Maiga, said the investment would help strengthen Nigeria’s infrastructure financing ecosystem and mobilise additional private capital.
InfraCredit Chief Executive Officer, Chinua Azubike, said the additional institutional capacity had become necessary as the company’s transaction pipeline and financing solutions continued to expand.
Since commencing operations in 2017, InfraCredit said it had facilitated more than N600 billion in long-term local-currency financing across 28 infrastructure projects and helped 14 first-time issuers access the domestic debt capital market.
The company said its guarantees had supported transactions including Nigeria’s first 15-year green infrastructure bond, while some corporate bond tenors supported through its platform had reached 20 years.
InfraCredit also said 20 of Nigeria’s 25 Pension Fund Administrators had participated in infrastructure bonds guaranteed by the company.
The new facility, supported by the International Development Association’s Private Sector Window Blended Finance Facility and Concessional Capital Window, is expected to increase InfraCredit’s ability to attract long-term domestic institutional investment into infrastructure.
