The Infrastructure Credit Guarantee Company Limited (InfraCredit) has secured a $15 million loan from the African Development Bank (AfDB) to boost infrastructure financing in Nigeria.

The AfDB announced the deal in a recent statement.

The agreement, the lender said, aims to strengthen InfraCredit’s capital base and attract institutional investors’ resources to help close Nigeria’s infrastructure financing gap.

Lamin Barrow, director-general of AfDB’s Nigeria country department, and Chinua Azubike, CEO of InfraCredit, signed the agreement in Lagos on June 14, 2024, according to the statement.

The AfDB said the facility would boost InfraCredit’s ability to secure additional long-term local currency financing through capital markets for infrastructure projects, mainly by tapping into capital pools from pension funds and other institutional investors in the country.

InfraCredit is a Nigerian credit guarantee company that mobilises long-term capital from institutional investors to support infrastructure projects, including green and climate-aligned developments.

In his remarks, Barrow said the bank’s support for InfraCredit demonstrates the importance of fostering innovation and scalable solutions to tap into capital pools from domestic institutional investors.

“Our support to institutions such as InfraCredit demonstrates the importance of promoting innovative and scalable solutions to leverage pools of capital from domestic institutional investors, and position local capital market as a viable alternative source of long-term funding to bridge the continent’s huge infrastructure deficit,” he said.

Also speaking, Azubike said the company is pleased with the AfDB’s confidence in its business model, which has facilitated private sector investment in major infrastructure projects and advanced green finance for climate-friendly developments.

This, he said, has fostered the growth of small and medium enterprises (SMEs), job creation, sustainable energy access, and overall economic development.

“Despite challenging market conditions, we have consistently demonstrated strong fundamentals, solid portfolio performance, a proven track record, and profitability,” the CEO said.

Azubike said expanding the company’s capital base with the facility would enhance its capacity to provide long-term local currency credit for the rapidly increasing pipeline of infrastructure projects, currently valued at over N839 billion ($579 million).

On his part, Solomon Quaynor, vice-president for private sector, infrastructure and industrialisation of AfDB, said the bank is pleased to provide additional capital to InfraCredit Nigeria.

“The success of InfraCredit has inspired the replication of its business model across the continent, a key part of our strategy for scaling up private sector financing in Africa,” Quaynor said.

“This is evidenced by our support for the establishment of a similar institution in Kenya covering the East Africa region.”

The AfDB also said the partnership supports several strategic objectives within the bank’s current country strategy for Nigeria.

According to the bank, this includes stimulating local currency bond market financing for key infrastructure sectors and enhancing economic diversification and competitiveness.