Following the first involvement of Leadway Assurance Plc, AIICO Insurance Plc has been admitted as the second private domestic institutional investor in InfraCredit. AIICO’s investment equals 5% of the institution’s share capital, according to the press release announcing the move.
This strategic move increased InfraCredit’s paid-in capital base to $175.14 million (N148.55 billion), resulting in an exceptional $875.7 million (N742.77 billion) credit guarantee capacity.
AIICO Insurance’s CEO, Babatunde Fajemirokun, commented on the transaction, noting that the company had previously invested in InfraCredit guaranteed bonds as well as other financing arrangements supported by the organization.
He stated, “AIICO Insurance has invested in InfraCredit guaranteed bonds and participated in novel financing arrangements promoted by InfraCredit over the last two years.”
Sanjeev Gupta, Chairman of InfraCredit’s Board of Directors, stated in a statement about the transaction that the move was part of an effort to boost private sector involvement in InfraCredit’s ownership structure.
He mentioned, “This investment marks another significant turning point and a significant milestone for InfraCredit, as we aim to increase private sector involvement in the ownership structure.”
The Nigeria Sovereign Investment Authority, GuarantCo, and other significant financial institutions back the institution. Private Infrastructure Development Group firms InfraCo Africa, KfW Development Bank, Africa Finance Corporation, and the African Development Bank.
InfraCredit essentially raises long-term investment for infrastructure projects in Nigeria. By acting as a catalyst, the institution attracts local currency financing from a variety of sources, including pension funds, insurance companies, and other long-term investors for infrastructure projects.
In Nigeria, InfraCredit now guarantees finance for infrastructure projects ranging from: Credit guarantee of N8.5 billion for North South Power (operators of Shiroro hydroelectric power facility).
Counter-guarantee of N20 billion for Lagos Free Zone Company. Credit guarantee of N13 billion for GEL Utility Limited, operators of the Port Harcourt refinery’s power plant, among others.
Chinua Azubike, CEO of InfraCredit, commented on AIICO Insurance’s admission as an investor. “AIICO’s equity investment further strengthens our core capital base and expands our guarantee capacity as we continue to act as a catalyst to attract domestic credit from pension funds, insurance firms and other long-term institutional investors into credit-worthy infrastructure projects.”
