Nigeria’s InfraCredit has secured a $50 million, 10-year subordinated loan from the International Finance Corporation to expand its capacity to guarantee long-term naira financing for infrastructure projects across the country.

The facility, provided in two $25 million tranches, is unsecured and ranks below senior creditors, giving the specialised infrastructure credit-guarantee provider additional subordinated capital to take on more credit exposure as its project pipeline grows.

IFC backs InfraCredit’s infrastructure financing model

InfraCredit specialises in providing guarantees for local-currency infrastructure bonds, helping pension funds and other institutional investors participate in projects that require long-term naira financing.

Since 2017, the company says it has helped mobilise more than N600 billion in long-term naira financing across 28 projects, including 14 first-time issuers. It has also supported Nigeria’s first 15-year green infrastructure bond and helped extend some corporate infrastructure bond tenors to 20 years.

Twenty of Nigeria’s 25 pension fund administrators have invested in InfraCredit-guaranteed securities, while several transactions have been oversubscribed.

Aliou Maiga, IFC’s financial institutions director for Africa, said the facility is designed to help channel domestic savings into infrastructure projects that support economic growth and job creation.

InfraCredit CEO Chinua Azubike described the financing as a vote of confidence in the company’s model as its pipeline of infrastructure transactions expands.

Long-term naira remains the financing gap

The financing targets sectors including renewable energy, climate-smart agriculture, digital infrastructure, telecommunications, healthcare and transport.

For InfraCredit, the opportunity lies in bridging the mismatch between projects that require 10- to 20-year naira funding and the shorter maturities typically available from commercial banks.

By guaranteeing local-currency bonds, the company helps transform infrastructure projects into securities that long-term domestic investors such as pension funds can hold without taking direct project-development risk.

The new facility also comes as InfraCredit works through a naira rights issue, adding another layer to its capital-raising strategy.

For Nigeria, the $50 million facility will not solve the country’s infrastructure-financing deficit. Its significance is in whether the additional capital enables InfraCredit to bring more first-time issuers to the domestic bond market and unlock financing for projects that might otherwise struggle to reach financial close.

The first test will be the infrastructure bonds InfraCredit guarantees after the facility becomes available, and whether new issuers, rather than only established sponsors, are among them.