InfraCredit secures IFC’s $50 million subordinated debt for local-currency infrastructure finance

Infrastructure Credit Guarantee Company Plc (InfraCredit) has secured a $50 million subordinated unsecured 10-year debt facility from the International Finance Corporation (IFC), a member of the World Bank Group.

The facility is expected to strengthen InfraCredit’s capacity to support infrastructure financing in the country, according to a statement on Wednesday by InfraCredit, Nigeria’s ‘AAA’-rated specialised infrastructure credit guarantee institution.

IFC is a member of the World Bank Group and the world’s largest global development institution focused on the private sector in emerging markets.

The agreement provides for a total committed Facility of $50 million, to be disbursed in two separate tranches of $25 million each.

The subordinated facility strengthens InfraCredit’s capital structure, enhancing its capacity to support a growing pipeline of infrastructure transactions.

It also mobilises long-term local currency financing across sectors including renewable energy, climate-smart agriculture, digital infrastructure and green growth, telecommunications, healthcare, transportation, and other productive sectors of the Nigerian economy.

Domestic capital for infrastructure

Chinua Azubike, Chief Executive Officer of InfraCredit, said the IFC’s investment reinforces InfraCredit’s capacity to provide financial solutions and strengthens its ability to mobilise long-term domestic capital for infrastructure.

“Building additional institutional capacity has been an important priority for InfraCredit as our transaction pipeline grows and our financing solutions evolve,” the InfraCredit CEO, Mr Azubike, said.

The InfraCredit CEO explained that the investment demonstrates the international development finance community’s continued confidence in InfraCredit’s business model.

According to him, the financial institution is supported by a diverse ecosystem of leading DFIs and development partners across multiple layers of our capital and risk-sharing structures, including subordinated debt, portfolio risk-sharing, counter-guarantees, first-loss capital and specialised investment facilities.

“That breadth of support is a significant competitive advantage and reflects the maturity and resilience of our institution.

“We look forward to building on this partnership with IFC as we work together to expand the flow of long-term capital into Nigeria’s infrastructure market,” the InfraCredit boss added.

Similarly, Aliou Maiga, IFC’s Financial Institutions Group (FIG) Director for Africa, said the investment in InfraCredit reflects IFC’s commitment to strengthening Nigeria’s infrastructure financing ecosystem and mobilising long-term private capital

“By supporting InfraCredit’s institutional capacity, we are helping mobilise domestic resources for infrastructure investments that can drive economic growth, job creation and sustainable development across key sectors of the Nigerian economy.

“We are pleased to deepen our partnership with InfraCredit as it continues to play a catalytic role in developing Nigeria’s local capital markets,” Mr Maiga said.

Institutional model

Beyond its financial value, the transaction reflects the continued evolution of InfraCredit’s institutional model and the depth of development finance support underpinning its role in Nigeria’s infrastructure financing ecosystem.

IFC joins a broad network of development finance institutions and partners supporting InfraCredit through complementary layers of equity, subordinated debt, portfolio risk-sharing, counter-guarantees, first-loss capital, specialised financing facilities and technical assistance.

According to the institutions, the partnership strengthened InfraCredit’s capital architecture and financial leverage, and enhanced market innovation through co-financing and project preparation/development platforms. It expanded its capacity to mobilise domestic institutional capital into sustainable infrastructure.

Investment

IFC’s investment is supported by the International Development Association Private Sector Window (IDA PSW) Blended Finance Facility, and the Concessional Capital Window.

Since commencing operations in 2017, InfraCredit has played a catalytic role in developing Nigeria’s domestic debt capital market by enabling first-of-their-kind transactions, extending corporate bond tenors, broadening institutional investor participation, and demonstrating the viability of long-term, local-currency infrastructure finance.

The company has facilitated over NGN600 billion in long-term local currency financing across 28 infrastructure projects and supported 14 first-time issuers in accessing Nigeria’s domestic debt capital market.

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InfraCredit-guaranteed transactions have contributed to several market milestones, including Nigeria’s first 15-year green infrastructure bond and the extension of corporate bond tenors to as long as 20 years.

Moreover, its guaranteed infrastructure bonds have consistently attracted strong participation from domestic institutional investors, including 20 of Nigeria’s 25 Pension Fund Administrators, with several transactions recording significant oversubscriptions.

The facility builds on a period of continued institutional evolution for InfraCredit, following the expansion of its domestic institutional shareholder base, its transition to a listed public company on the NASD OTC Securities Exchange, and the continued development of innovative financing solutions that complement its core guarantee business while supporting infrastructure projects across different stages of the financing lifecycle.

InfraCredit said the facility reinforces the complementary role that development finance institutions and domestic capital markets can play in expanding long-term local currency infrastructure finance.

“By strengthening InfraCredit’s capital base and institutional capacity, the Facility will support continued market development while broadening the availability of long-term private capital for sustainable infrastructure across Nigeria,” the statement read.