ATIDI issues $41m counter guarantee to InfraCredit for Bond and Debt Finance in Nigeria
The African Trade & Investment Development Insurance (ATIDI), a prominent pan African multilateral Insurer, has recently announced the issuance of a portfolio counter guarantee cover worth USD41 million to InfraCredit. InfraCredit is a specialized infrastructure credit guarantee institution in Nigeria that holds a AAA rating and provides local currency guarantees to enhance the credit quality of debt instruments used to finance creditworthy infrastructure assets in Nigeria. This strategic move by ATIDI highlights its dedication to strengthening infrastructure financing initiatives in Africa’s largest economy.
ATIDI CEO Manuel Moses emphasized the organization’s commitment to supporting risk mitigation associated with infrastructure financing. He stated that this step is crucial in stimulating investment and promoting development in a vital sector.
The portfolio counter guarantee offered by ATIDI plays a crucial role in providing protection and instilling confidence among investors and stakeholders. It also enables InfraCredit to expand its reach and impact in facilitating access to affordable financing for critical infrastructure projects throughout Nigeria. This collaborative effort between ATIDI and InfraCredit demonstrates their shared vision of driving sustainable growth, enhancing resilience, and advancing Nigeria’s infrastructure development agenda.
ATIDI’s portfolio counter guarantee cover further solidifies its position as a key player in mitigating risk and catalyzing investment in critical infrastructure projects across the country. This partnership not only represents a significant milestone in promoting sustainable economic development and fostering resilience within Nigeria’s infrastructure sector but also directly supports the development of Nigeria’s capital and debt markets. It enables the issuance of local currency guarantees and attracts investment interest from pension funds, insurance firms, and other long-term investors.
Nigeria, a prominent African economic powerhouse with a thriving private sector, is on the verge of making significant pro
gress in infrastructure development and economic growth. The collaboration between ATIDI and InfraCredit will bolster the country’s infrastructure financing landscape. By leveraging ATIDI’s expertise in insurance and InfraCredit’s proven track record in enhancing infrastructure credit, the partnership aims to unlock capital and facilitate access to affordable financing for crucial infrastructure projects throughout the nation.
“We take great pride in the expansion of our partnership with ATIDI, as we embark on this second risk-sharing transaction. This groundbreaking local currency portfolio counter-guarantee transaction will enhance InfraCredit’s capacity to issue more guarantees, thereby reducing the cost of capital and attracting larger-scale domestic credit. This will particularly benefit local pension funds and insurance investors, enabling them to finance infrastructure development in Nigeria. Our collaboration with ATIDI serves as a strong testament to the significant role that multilateral organizations can play in ensuring sustainable debt levels for borrowing countries. By leveraging their balance sheets as risk-sharing partners alongside local institutions, we can mobilize domestic resources from the private sector to finance infrastructure development in local currency. This, in turn, will deepen the domestic debt capital markets and contribute to sustainable development,” stated Chinua Azubike, CEO of InfraCredit.
Nigeria became a member of ATIDI in 2019. This membership not only amplifies the advantages of ATIDI’s insurance support, which boosts Foreign Direct Investment (FDI) and cross-border trade, but also enhances the country’s economic growth and stability. Since its inception, ATIDI’s portfolio has represented a total gross exposure of over USD 1.3 billion, unlocking investments and trade volumes amounting to over USD 16 billion in sectors such as Energy and Gas, Finance & Insurance, Construction, Agriculture, Information and Communication, and Mining and Quarrying.
