Nigerian state-owned Infrastructure Credit Guarantee Company plans to raise additional capital to fund critical projects in Africa’s biggest economy.
The unit of Nigeria Sovereign Investment Authority is looking to raise equity and debt capital next year and go into risk sharing with development finance institutions to boost its insurance guarantee capacity, Chief Executive Officer Chinua Azubike said in a telephone interview in Lagos. “You need access to funding to kick-start the economy.”
With Nigeria going through its second recession in four years, President Muhammadu Buhari’s government is seeking to expand investments to help stimulate recovery. Weak institutions and governance frameworks, and a low tax base in Africa’s most populous country, have hindered efforts to build infrastructure, creating a gap that requires at least $3 trillion over 30 years to close, Moody’s Investor Services said in a report last week.
InfraCredit was established to guarantee companies seeking to raise local currency debt for infrastructure development in Africa’s biggest crude producer. It plans to double its guarantee portfolio to 100 billion naira next year and probably exceed that when it raises additional capital of $30 million to $40 million, according to the chief executive.
The Lagos-based company is working on private-sector led telecommunications, health care and agriculture projects in addition to a government road infrastructure it plans to deliver next year, Azubike said.
InfraCredit can help clients raise as much as 20-year funds in the local market, Azubike said. “In addition to our guarantee services, we work with our development partners to render technical assistance to companies to come up with bankable projects.”
By Emele Onu