Infracredit, French Development Agency Sign Agreement to PPPs in Nigeria

Michael Olugbode in Abuja

InfraCredit, a specialised infrastructure credit guarantee institution in Nigeria and the Agence Française de Développement (AFD) have signed a Technical Assistance Financing Agreement.

Under the agreement, the AFD would provide project preparation and development technical assistance support for InfraCredit’s prospective pipeline of public private partnership (PPP) projects in selected state governments that require support to improve their bankability and attract private sector participation.
Thus, it would enable them access long-term local currency financing from the domestic debt capital markets.

Technical and legal assistance as well as feasibility studies for projects selected in agreement between InfraCredit and AFD would enable, among others, to support the development of infrastructure projects and job creation.
InfraCredit’s Annuity PPP Guarantee was developed to facilitate the sustainable financing of new infrastructure projects alongside subnational governments in Nigeria.

Such eligible projects could benefit from InfraCredit’s guarantee, which could mobilise up to 20-year local currency financing from the domestic debt capital markets.

Speaking on the Agreement, Chief Executive Officer of InfraCredit, Chinua Azubike, stated that: “To date, InfraCredit’s guarantees have enabled the issuance of up to $266 million (Naira Equivalent) of local currency infrastructure bonds of which 61 per cent include PPP projects. However, an increasing pipeline of sub-national infrastructure projects requires project preparatory support to deliver well-structured bankable projects that can access the debt capital markets.

“This collaboration will enable state governments adopt new funding tools and PPP models that will attract and retain private sector’s financial incentive to invest in viable infrastructure projects. AFD’s technical assistance funding will enable InfraCredit build deal pipelines of well-prepared state government-supported and private sector-led infrastructure projects to be executed.”

Speaking on the agreement with InfraCredit, Xavier Muron, Country Director of AFD in Nigeria, noted that: “This €600,000 grant to Infracredit will finance studies and technical assistance for future infrastructure projects via public-private partnerships throughout Nigeria. Ultimately, it aims at mobilising further the private sector in infrastructure projects.”