The Nigerian Sovereign Investment Authority (“NSIA” or “The Authority”) and InfraCredit have co-developed an innovative Construction Finance Warehouse Facility (CFWF), seeded with NGN10 billion, to unlock long-term capital towards the development of sustainable greenfield infrastructure projects in Nigeria.
The CFWF is a multi-funder revolving facility co-developed by NSIA and InfraCredit to facilitate the provision of construction finance for eligible sustainable greenfield infrastructure projects backed by InfraCredit’s guarantees and to be subsequently refinanced through an InfraCredit-guaranteed long-term debt financing from the domestic capital markets.
The CFWF has been designed to provide much-needed early-stage debt financing for sustainable infrastructure projects until such projects can secure long-term financing from the debt capital markets, post-commercial operation, supported by InfraCredit’s guarantee. With a downside protection on investors capital, the Facility will mobilise and increase the appetite of early-stage investors, reduce the cost of project finance, and boost the overall success rate of greenfield project execution.
NSIA has seeded the CFWF with NGN10 billion to mobilise additional funding from development financiers and institutional investors. The aim is to reach up to NGN100 billion capacity within the next three years and unlock up to NGN 500 billion in well-structured, bankable infrastructure projects, which will expand the market with quality infrastructure projects for institutional investors backed by credit enhancements from InfraCredit.
Chinua Azubike, CEO of InfraCredit said: “To close the infrastructure gap in a sustainable way, we need more greenfield infrastructure projects to reach financial close. We are pleased to be supported by our sponsor, the NSIA, in sustaining strategic innovative funding solutions at the earlier stages of the infrastructure project’s life cycle, which is a crucial and urgent intervention to make projects more resilient, and accelerate private sector investments in infrastructure that will improve Nigeria’s economic trajectory .”
Aminu Umar-Sadiq, MD and CEO of NSIA, said, “NSIA, through the creation of InfraCredit, has successfully channeled long-term institutional funding towards brownfield infrastructure projects in Nigeria. The CFWF is set to amplify this capital mobilization, unlocking a source of long-term local currency capital for sustainable greenfield investments, in a downside-protective manner. This will significantly enhance access to sustained financing for green projects, consequently driving the development of sustainable infrastructure across Nigeria.”