InfraCredit has also attracted direct equity investment from two local pension funds, in addition to the UK programme, as part of its listing on Nigeria’s NASD market.
InfraCredit, Nigeria’s only domestic creditor guarantor, has received NGN9.5bn (€5.2m) of equity investment from the UK’s MOBILIST programme in support of InfraCredit’s listing on Nigeria’s NASD over-the-counter securities exchange. In total, InfraCredit raised NGN27bn in new equity from investors, bringing the total overall value of the listing to NGN64bn.
InfraCredit issues Naira-denominated guarantees that mitigate risk for key local credit providers, such as pension funds and insurance firms, by improving the creditworthiness of infrastructure debt instruments.
Such support is seen as vital in a country where the long-term capital needed for vital infrastructure investment is generally not available from the local banking market. MOBILIST cites a Nigerian government estimate that more than $2.3trn (€2trn) in investment is needed between 2021 and 2043 to close the infrastructure funding gap.
InfraCredit was established in 2017 by GuarantCo – part of the multi-donor financed Private Infrastructure Development Group (PIDG) – and the Nigeria Sovereign Investment Authority. Other PIDG-backed guarantee companies aimed at deepening domestic debt capital markets for infrastructure finance have since been established in other developing countries, such as Pakistan’s InfraZamin and Kenya’s Dhamana.
UK government-backed MOBILIST helps facilitate equity listings in emerging markets though investment and technical assistance. It said its investment would also support InfraCredit to shift its portfolio toward greater investment in renewable energy sources. In November, InfraCredit said it had secured a $30m risk-sharing and blended local currency co-financing facility from British International Investment (BII) to support the clean energy transition in Nigeria.
New capacity
By listing on the NASD, InfraCredit has already attracted direct equity investment from two pension funds, which will provide it with further capacity to offer guarantees for new projects. The company has already used guarantees to build an infrastructure project pipeline of over NGN750bn.
Chinua Azubike, InfraCredit’s CEO, said that by broadening the company’s ownership and adhering to public market standards, InfraCredit aimed to create long-term impact by strengthening investor confidence in it as a trusted catalyst for sustainable infrastructure finance.
“This reflects our ambition to build a deeper, more inclusive capital market for domestic resources that accelerates infrastructure delivery in Nigeria in line with our mission to unlock long-term local currency infrastructure finance,” he said.
Jonny Baxter, UK deputy high commissioner in Lagos, said the listing showed the potential of public markets to mobilise domestic capital at scale.
“InfraCredit will enable local institutional investors to benefit from the growth opportunities presented by sustainable infrastructure development in their own market while ensuring that the local firms driving these projects can access the capital they need,” he said.
InfraCredit said it had played a catalytic role in mobilising over NGN264bn in long-term local currency financing across sectors such as renewable energy, housing, transportation, logistics, power, telecoms, and manufacturing.
The company said it was also exploring a future listing on the country’s main stock exchange, the Nigerian Exchange (NGX).
In August 2023, MOBILIST announced a partnership with NGX to enable greater investment toward achieving the UN Sustainable Development Goals through listed products.
In February, the UK government announced fresh funding of up to £100m (€120m) for MOBILIST. The organisation’s recent investments include one in ImpactA Global, a UK-based private credit firm for global emerging markets, which raised $200m from public and private investors.
Last year, Impact Investor was told how MOBILIST was seeking to champion the adoption in Africa of the listed “yieldco” model of investment though the pooling of assets such as solar and windfarms.
