KfW Development Bank, the largest development bank in Europe, invested €31 million in Infrastructure Credit Guarantee Company Limited (InfraCredit), a specialised infrastructure credit enhancement facility established by the Nigeria Sovereign Investment Authority (NSIA), to enhance infrastructure investments in Nigeria.
The surbordinated unsecured 10-year investment will strengthen InfraCredit’s guarantee capacity, enable it achieve targeted capitalisation and bolster its balance sheet.The investment will also be accompanied with a technical assistance grant to support InfraCredit’s market development and capacity building programme.
The investment promotes an innovative catalytic second loss paid-in capital incorporated into InfraCredit’s capital structure, and its repayment will be subordinated to the payment of all senior indebtedness, including beneficiaries of its credit guarantees in the event of any bankruptcy, liquidation or other similar events.The subordinated unsecured long term capital will rank as qualifying capital for financial leverage purposes.
In a statement, the Managing Director/Chief Executive Officer of InfraCredit, Chinua Azubike, said “we are pleased to receive KfW, a highly reputable international development finance institution, as one of InfraCredit’s investors. KfW is a unique DFI with the appropriate motivation and risk appetite to support innovative financial institutions like InfraCredit that foster market development and leverage additional capital from private institutional investors.”
Michael Wehinger First Vice President, West Africa & Madagascar of KfW noted that “InfraCredit’s mission of mobilising private capital from local sources for private sector investments in local infrastructure is of importance to KfW.”
He said “we believe that the management team with the support of the board has the experience, the right attitude and a very strong commitment to make InfraCredit become an important player in the Nigerian capital market and an important accelerator for private investments”.
Wehinger added that “I am proud that from today KfW on behalf of the Government of Germany is able to support InfraCredit, not only by enlarging InfraCredit’s capital base with the subordinated capital but also with substantial technical assistance funding to support a sustainable growth of InfraCredit.”
Speaking on the successful completion of the capital raise, the Chairman, InfraCredit and MD&CEO, NSIA, Uche Orji said “I am extremely pleased that a respected, long-term oriented investor like KfW shares our view about the vast opportunity ahead for InfraCredit.”
Orji noted that “we therefore view KfW’s investment as a vote of confidence in InfraCredit and its sponsors. More importantly, we consider the investment a signal of the KfW’s commitment to the long-term strategic growth of InfraCredit as well as the development of long term local currency infrastructure finance in Nigeria”.
KfW, a public law institution existing under the laws of the Federal Republic of Germany with its headquarters in Frankfurt, and InfraCredit have agreed to pursue the common goal to enhance infrastructure investments in Nigeria by supporting private infrastructure enterprises.