FSD Africa, a specialist development agency working to help make finance work for Africa’s future, and InfraCredit, a rated specialized infrastructure credit guarantee institution in Nigeria, have signed a Technical Assistance Agreement under which FSD Africa will provide funding for technical assistance to support pre-feasibility studies as well as 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 project’s successful implementation will allow up to 10 climate-aligned infrastructure projects to reach financial close, resulting in the creation of new jobs and the issuance of more capital markets instruments to institutional investors.
“To date, InfraCredit’s guarantees have enabled the issuance of up to USD200 million of local currency infrastructure bonds,” said Chinua Azubike, Chief Executive Officer of InfraCredit. “However, an increasing pipeline of climate-aligned infrastructure projects is constrained by limited financial resources being dedicated to delivering well-structured projects that can access the debt capital markets.”
Through technical assistance, the collaboration with FSD Africa will also include the development of an innovative financial solution that will catalyze more bankable climate-smart infrastructure projects for InfraCredit’s guarantees, accelerating the issuance of creditworthy local currency infrastructure bonds to domestic institutional investors and thus deepening Nigeria’s debt capital markets.
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.