Infracredit and FSD Africa sign agreement for $200m to unlock climate-aligned local currency infrastructure bonds in Nigeria
InfraCredit, rated specialized infrastructure credit guarantee institution in Nigeria and FSD Africa, a specialist development agency working to help make finance work for Africa’s future, have signed a Technical Assistance Agreement under which FSD Africa will provide funding for technical assistance to support pre-feasibility studies as well as the pre-transaction and transaction costs, including the design of innovative financing solutions for eligible projects that can issue climate-aligned local currency infrastructure bonds.
The successful implementation of the project will enable up to ten climate-aligned infrastructure projects to reach financial close, support new job creation and enable more capital markets instruments to be issued to institutional investors.
Speaking on the Agreement with FSD Africa, the Chief Executive Officer of InfraCredit, Chinua Azubike, stated that “To date, InfraCredit’s guarantees have enabled the issuance of up to USD200 Million of local currency infrastructure bonds, however, an increasing pipeline of climate-aligned infrastructure projects are constrained by limited financial resources being dedicated to deliver well-structured projects that can access the debt capital markets”
The collaboration with FSD Africa through technical assistance support will also involve the design of an innovative financial solution that will catalyze more bankable climate-smart infrastructure projects for InfraCredit’s guarantees which will accelerate the issuance of creditworthy local currency infrastructure bonds to domestic institutional investors, thereby deepening the debt capital markets in Nigeria.
Speaking on the Agreement entered into with InfraCredit, Mark Napier, the Chief Executive Officer of FSD Africa, noted that: “FSD Africa is pleased to facilitate the design of innovative financial markets products that will support institutions like InfraCredit provide access to inclusive capital”
Technical assistance will support the design of a vital climate-focused infrastructure facility that will bridge short-term greenfield capital with long-term capital markets funds. Our partnership with InfraCredit intends to spur increased access to long-term finance and build financial sector resilience and environmental sustainability through local credit enhancement facilities (Guarantees) provided by InfraCredit.
