The UK government’s MOBILIST programme is investing NGN9.5 billion ($6 million) in InfraCredit, Nigeria’s first and only domestic creditor guarantor, in support of the company’s listing on Nigeria’s NASD OTC Exchange Plc (NASD).
Finance: UK Launches £100 million MOBILIST Funding to Unlock Investments
The total listing is valued at NGN 64 billion ($41 million), with InfraCredit raising NGN 27 billion ($17.7 million) in new equity.
The Nigerian government has estimated that over $2.3 trillion in investment will be needed between 2021 and 2043 to close the country’s enormous infrastructure gap, but the long-term capital needed is not available in the local banking market.
InfraCredit helps to overcome this challenge by issuing Naira-denominated guarantees that help to mitigate risk for investors and improve the creditworthiness of Nigerian infrastructure debt instruments.
These guarantees attract Nigerian institutional investors – like pension funds and insurance firms – and enable them to invest in instruments used to finance infrastructure projects.
InfraCredit has used guarantees to secure an infrastructure project pipeline of over NGN750bn ($500 million).
However, through listing on the NASD with MOBILIST’s backing, it has now attracted direct equity investment from two pension funds, which will enable it to expand its capacity to extend even more guarantees for new projects.
MOBILIST ’s investment will also support InfraCredit’s green growth strategy to transition its portfolio toward greater investment in renewable energy sources.
As part of its growth ambitions, InfraCredit will explore a listing on the Nigerian Exchange (NGX). MOBILIST previously announced a partnership with NGX to enable greater investment toward achieving the United Nations Sustainable Development Goals (SDGs) through listed products.
This partnership forms part of the UK’s continued commitment to supporting Nigeria in developing its capital market.
Mr. Jonny Baxter, British Deputy High Commissioner in Lagos, commented:
“InfraCredit’s success highlights the power and impact of long-term partnerships, and the UK via the Foreign Commonwealth and Development Office (FCDO) is proud to have played a key role in not just the creation of InfraCredit through the Private Infrastructure Development Group (PIDG), but its continued growth. This transaction illustrates the potential of public markets to mobilise domestic capital at scale. By listing with the backing of MOBILIST, 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.”
Mr. Chinua Azubike, InfraCredit CEO, commented:
“This moment marks the beginning of a new chapter for InfraCredit. We are pleased with the confidence reposed in us by our new domestic institutional investor shareholders alongside the UK Government through MOBILIST, and our transition to a listed public company with access to equity capital markets. 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. By broadening our ownership and adhering to public market standards, InfraCredit aims to create long-term impact by strengthening investor confidence as a trusted catalyst for sustainable infrastructure finance as we navigate the pathway to growth and scale.”
InfraCredit was established in 2017 by GuarantCo, a Private Infrastructure Development Group (PIDG) company, and the Nigerian Sovereign Investment Authority (NSIA) to deepen domestic debt capital markets for infrastructure finance and unlock long-term infrastructure financing in Nigeria.
It was the first of several such entities in other countries, including InfraZamin in Pakistan and Dhamana in Kenya.
InfraCo Africa, another PIDG company, became an investor in 2020. InfraCredit has since put in place financing partnerships with UK entities British International Investment (BII) and Financial Sector Deepening Africa (FSDA).
