Guarantco Provides N20.23bn Counter-Guarantee to Infracredit for LFZC Bonds.

Kayode Tokede

GuarantCo, part of the Private Infrastructure Development Group (PIDG), has announced that it has provided  N20.23 billion or $25 million counter-guarantee with a sixteen-year tenor to Infrastructure Credit Guarantee Company Limited (InfraCredit) in support of Lagos Free Zone Company’s (LFZC) three guaranteed infrastructure bond issuances totalling N53 billion or $65.5 million.

The transaction, it said in a statement, is part of a larger guarantee facility fronted by InfraCredit to support the bond programme.

Owned and developed by Tolaram, LFZC raised the funds to finance continued development of the Lagos Free Zone (the Zone) which is being developed as the largest integrated port based economic zone in Nigeria and shall serve as the industrial and maritime hub for Nigeria and West Africa.

The CEO of GuarantCo, Layth Al-Falaki, said: “We are delighted to have counter-guaranteed the bond issuance of Lagos Free Zone Company to the benefit of the economy and local people in Nigeria and West Africa. This is also our first joint transaction with InfraCredit, which we and the Nigerian Sovereign Investment Authority helped set up in 2017.  

“We are very happy to see the impressive progress that InfraCredit Nigeria has made in the past six years and this joint transaction will be an important pathfinder for GuarantCo’s relationships with other local Credit Enhancement Facilities, including InfraZamin in Pakistan and others in the pipeline, that our parent company PIDG, with the support of its companies, has or is planning to set up.”

Also, the CEO of InfraCredit, Chinua Azubike in a statement said: “One of the key strategies of InfraCredit towards addressing the significant infrastructure financing deficit in Nigeria is to expand our guarantee capacity through risk sharing partnerships with development finance institutions, by leveraging their capacity to share our long-term risks. “

“The Counter-Guarantee provided by GuarantCo to support the Lagos Free Zone Company will strengthen our capacity to underwrite larger infrastructure projects and mobilise more domestic credit from local institutional investors to support impactful infrastructure projects in Nigeria that will support more jobs and accelerate economic growth.”

In addition, the CFO of Lagos Free Zone, Ashish Khemka in a statement said, “We value our partnership with GuarantCo and InfraCredit towards the common goal of realising enabling infrastructure projects in emerging markets like Nigeria.

“Lagos Free Zone and Lekki Port projects are a testament to our commitment to change the paradigm of the ease of doing business in Nigeria and we appreciate the critical role played by credit guarantee programs run by GuarantCo and InfraCredit in enabling our access to long term credit required for such projects.”