By Goddy Egene
InfraCredit, a specialised infrastructure credit guarantee institution, has announced that its drawdown of a $10 million subordinated unsecured 10-year facility has been completed under the Subordinated Loan Agreement with the African Development Bank (AfDB).
The bank’s director of Financial Sector Development, Stefan Nalletamby, said in a statement that at the time of the board’s approval of the facility, “The bank’s support will strengthen the capital base of InfraCredit, underpinning the expansion of the company’s core business of guaranteeing of bonds issued to fund infrastructure projects.”
It added: “This adds to the bank’s existing initiatives to mobilise domestic institutional savings and stimulate non-sovereign local debt capital market development in Nigeria.
“This ultimately helps to increase private sector financing for critical infrastructure projects in key sectors including energy, agriculture, water, health and education, through local capital markets.”
Specifically, this facility will help to increase private sector financing for critical infrastructural projects in sectors such as power, renewable energy, telecommunications, healthcare, transportation, agriculture, amongst others.
The investment by AfDB, according to the statement, demonstrates the strong investor confidence in the fundamentals of InfraCredit’s business and would promote the deepening of the local debt capital market.
Pursuant to the drawdown, InfraCredit’s capital base would increase to $146 million (about N58.5 billion).
Commenting on the development, the Chief Executive Officer of InfraCredit, Chinua Azubike, said: “Despite the impact of COVID-19, and changes to macro-economic assumptions, we are pleased to have reached yet another milestone in our pursuit to strengthen our robust balance sheet and guarantee issuing capacity. Notwithstanding challenging market conditions, we have continued to demonstrate our strong fundamentals, solid underlying portfolio performance, proven track record and profitability.
“With the admission of AfDB to our capital structure, we are confident of our continuing ability to deepen market penetration and support access to long term domestic credit for the growing pipeline of infrastructure projects that will create jobs and support local economic growth.”