A little-known Nigerian entity, InfraCredit, has just secured a €31 million worth of investment capital from Europe’s largest development bank, KFW Development Bank.
The €31 million investment is expected to facilitate various efforts being made by InfraCredit’s to advance infrastructural development in Nigeria. It is a ten-year investment deal which will also come along with technical assistance. In the same vein, the deal is expected to help InfraCredit grow its balance sheet and improve on its capitalisation.
More details about the deal
The investment also entails a second loss paid-in capital, which has been integrated into InfraCredit’s financial structures. The repayment of the second loss paid-in capital shall only occur after every senior indebtedness is paid off; including the beneficiaries of credit guarantees.
Meanwhile, reacting to this development, the Chief Executive Officer of InfraCredit, Mr Chinua Azubike, said it is a pleasant development.
“We are pleased to receive KfW, a highly reputable international development finance institution, as one of InfraCredit’s investors.
“KfW is a unique development finance institution with the appropriate motivation and risk appetite to support innovative financial institutions like InfraCredit that foster market development and leverage additional capital from private institutional investors.” – Azubike
Also commenting on this development was Mr Michael Wehinger, the First Vice President of KFW’s West African and Madagascar operations. He also expressed optimism that with the partnership, KFW would be able to help InfraCredit become a major player in the Nigerian market. In his own words:
“I am proud that from today KfW on behalf of the Government of Germany is able to support InfraCredit, not only by enlarging InfraCredit’s capital base with the subordinated capital but also with substantial technical assistance funding to support a sustainable growth of InfraCredit.”
InfraCredit is Nigeria’s specialised infrastructure credit enhancement facility. It was established by the Nigerian Sovereign Investment Authority (NSIA) in collaboration with GuarantCo, with the aim of providing guarantees that will enhance the credit quality of every local currency debt instruments that are issued to finance eligible infrastructure projects in Nigeria.