Infrastructure Credit Guarantee Company Limited (InfraCredit) has announced the successful second round closing of €23.5 million (USD Equivalent) subordinated capital investment by its existing investor, KfW Development Bank (KfW), the largest development bank in Europe.
The Government of the Federal Republic of Germany through KfW Development Bank has invested an additional EUR€23.5 million (USD Equivalent) 10-year subordinated unsecured capital in further support of InfraCredit, to increase its capitalisation and strengthen its balance sheet, as it continues to grow its guarantee portfolio. The investment is accompanied by a EUR €0.75 million technical assistance grant funds to support InfraCredit’s market development and capacity building programme.
The subordinated unsecured long-term capital will rank as qualifying capital for capital adequacy and financial leverage purposes.
In October 2018, KfW Development Bank made an initial subordinated capital investment of €31million (USD Equivalent) in InfraCredit. The financial cooperation is coherent with the goals of the 2030 Agenda (SDGs), and will make a major contribution to job creation and sustainable economic growth (SDG 8) and promotion of innovations and the expansion of infrastructure (SDG 9).
In a statement from Chinua Azubike, managing director/Chief Executive Officer of InfraCredit, said “We are delighted and extremely pleased with the confidence that a respected, long-term oriented development institution like KfW has demonstrated in the vast opportunity ahead for InfraCredit, this second round investment is a strong signal of KfW’s commitment to the long-term strategic growth of InfraCredit and the development of long term local currency infrastructure finance in Nigeria”
According to Jan Martin Witte Director, Central Africa & Regional Funds of KfW, ‘’We are very proud to partner with InfraCredit to promote sustainable infrastructure investments in local currency in Nigeria. Today, we signed an additional subordinated loan facility with InfraCredit worth EUR€23.5 million“
InfraCredit is a ‘AAA’ rated infrastructure credit enhancement facility established as a commercial entity by the Nigeria Sovereign Investment Authority and GuarantCo to provide guarantees to enhance the credit quality of local currency debt instruments issued to finance eligible infrastructure assets in Nigeria. InfraCredit acts as a catalyst to attract the investment interest from pension funds, insurance firms and other long-term investors, thereby deepening the Nigerian debt capital markets. InfraCredit operates on a commercial basis and benefits from private sector governance.
KfW is 80 percent-owned by the Federal Republic of Germany (FRG), with the remainder owned by the German federal states. It was established in 1948 and is the largest development bank in Europe. Its obligations are backed by a direct and unlimited statutory guarantee from FRG. Based on the maintenance obligation (Anstaltslast), FRG is committed to safeguarding the economic basis of KfW and ensuring that its operations can continue in the event of financial difficulty. The bank undertakes a broad range of activities including SME lending via commercial banks, retail, housing, municipal and social infrastructure lending, as well as certain capital markets activities and lending in developing countries. KfW has been assigned a long-term international credit rating of ‘AAA’ from Fitch and S & P.
