Phillipe Valahu, Chief Executive Officer of the Private Infrastructure Development Group, has emphasised the need to unlock domestic institutional capital to drive infrastructure development in Nigeria, highlighting credit enhancement, regulatory reform, and stronger project preparation as critical enablers.

In an interview, Valahu outlined how innovative financing tools and public-private partnerships (PPPs) can bridge Nigeria’s infrastructure funding gap while aligning with national development priorities.

Credit Enhancement Driving Investment

Valahu explained that many infrastructure projects in Nigeria face a “rating gap,” where viable projects are considered too risky for institutional investors like pension funds.

He noted that credit enhancement mechanisms, such as guarantees provided by entities like InfraCredit, help bridge this gap by assigning higher credit ratings to projects.

This approach enables three key outcomes:

• Credit substitution, where projects inherit stronger credit ratings
• Longer financing tenors, extending funding from typical five-year bank loans to 15–20 years
• Reduced foreign exchange risk through local currency financing

“These mechanisms make infrastructure investments more attractive and aligned with long-term funding structures,” he said.

Aligning with Nigeria’s Green Finance Agenda

Speaking on Nigeria’s Sovereign Green Bond issued in June 2025, Valahu described it as a significant step toward financing the country’s Energy Transition Plan.

However, he stressed that sovereign funding alone is insufficient.

“Scaling infrastructure financing requires more bankable private-sector projects and deeper participation from domestic investors,” he said.

PIDG, he added, is focused on supporting private-sector participation through technical assistance, concessional funding, and credit enhancement tools to boost investment in renewable energy, transport, and climate-resilient infrastructure.

Mobilising Africa’s $2 Trillion Domestic Capital

Valahu confirmed ongoing collaboration with the African Development Bank Group to mobilise domestic capital across Africa, including pension funds, insurance assets, and sovereign wealth funds.

He noted that efforts are underway to establish additional credit enhancement facilities across West and Southern Africa, with expected progress in the coming months.

Barriers to Unlocking Nigerian Capital

According to Valahu, three major barriers continue to limit infrastructure investment in Nigeria:

• Regulatory constraints, including limits on pension fund exposure
• Capacity gaps among local financial institutions
• Perceived investment risks

He cited data showing infrastructure debt default rates in Africa remain relatively low, arguing that the sector is often misclassified as high-risk.

Shift from Aid to Investment Mobilisation

Valahu called for a shift in global development finance from reliance on aid to a mobilisation model that attracts private capital.

He emphasised that public funds should be used strategically to unlock larger pools of private investment, noting that domestic capital in Africa remains underutilised due to regulatory and structural limitations.

Fixing PPP Challenges in Nigeria

On public-private partnerships, Valahu identified weak project preparation as a major reason many infrastructure deals fail to reach financial close.

He listed common issues including:

• Poor feasibility studies
• Unclear risk allocation
• Weak institutional capacity
• Misalignment with investor requirements

He noted that improving early-stage project design, strengthening transaction structuring, and incorporating blended finance solutions are essential to delivering bankable projects.

Outlook

Valahu maintained that Nigeria has strong potential to attract infrastructure investment if it can unlock domestic capital, strengthen regulatory frameworks, and improve project preparation standards.

He concluded that a coordinated approach involving government, investors, and development institutions will be key to accelerating infrastructure delivery and supporting long-term economic growth.

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Craneburg EKSG is a special purpose vehicle formed by Craneburg Construction Company Limited to execute the project under a Design, Build, Finance, Operate, Maintain and Transfer (DBFOM) concession model. The initiative, developed through a Public-Private Partnership (PPP), is the first successful corporate infrastructure bond issued for a sub-national PPP project backed by InfraCredit’s Annuity PPP Guarantee Product.

The Ekiti ring road is central to the state’s transportation master plan and is expected to enhance connectivity, reduce traffic congestion, and stimulate economic activities along key corridors. The project also aligns with broader state plans including the development of a cargo airport, an agro-industrial processing zone, and a knowledge hub.

The bond, which received a ‘AAA’ rating from Agusto & Co. and GCR, was subscribed by seven domestic pension funds and institutional investors. Proceeds will fund the first phase of the ring road, including a 17.84km stretch, tolling infrastructure, and smart operational systems. The project is projected to create over 250 direct jobs and support the UN Sustainable Development Goals (SDGs).

InfraCredit CEO Chinua Azubike described the deal as a breakthrough in mobilising long-term domestic capital for infrastructure, showcasing how PPPs can deliver sustainable, revenue-generating projects at the sub-national level.

Ekiti State Commissioner for Finance, Hon. Akintunde Oyebode, emphasized the project’s transformative potential:

“The Ado-Ekiti Ring Road is part of our broader infrastructure blueprint, linking critical assets across the state. This deal represents a new paradigm in how states can unlock private capital for inclusive development.”

Femi Edun, Chairman of Craneburg Construction Company, lauded the state’s vision and InfraCredit’s role in enabling the project:

“This initiative sets a new benchmark in infrastructure delivery at the sub-national level, and we are proud to lead its execution.”

The partnership exemplifies a growing shift towards blended finance mechanisms for infrastructure development in Nigeria, combining state ambition, private capital, and long-term vision.

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The landmark listing, backed by the United Kingdom Government, is expected to catalyze sustainable infrastructure growth and strengthen Nigeria’s ongoing energy transition. The UK’s involvement comes via its Mobilising Institutional Capital Through Listed Product Structures (MOBILIST) initiative, which invested ₦9.5 billion ($6 million) into InfraCredit as part of a broader ₦64 billion ($41 million) listing. This move highlights a clear effort to mobilize domestic institutional capital and direct it toward Nigeria’s critical infrastructure needs.

In a statement released by the British High Commission on Monday, the UK emphasized the importance of strengthening Nigeria’s infrastructure base, especially in the face of a projected $2.3 trillion financing requirement between 2021 and 2043. Given the limitations of local banks in providing long-term funding, InfraCredit has emerged as a key enabler in the sector. The organization provides Naira-denominated credit guarantees that help de-risk infrastructure bonds and enhance their credit quality. This strategy has made it viable for local institutional investors—such as pension funds and insurance companies—to commit funds to long-term projects that were previously considered too risky.

To date, InfraCredit has supported a project pipeline valued at over ₦750 billion ($500 million) using its risk guarantee model. With the latest capital injection, which also includes participation from two Nigerian pension funds, InfraCredit is now positioned to expand its footprint and fund more transformative infrastructure projects nationwide.

The listing on NASD also marks a significant transition for InfraCredit from a private institution to a publicly listed entity, signaling a commitment to transparency, accountability, and long-term sustainability. It is also a stepping stone toward a future listing on the Nigerian Exchange (NGX), a move that aligns with MOBILIST’s broader agenda of promoting investment vehicles that contribute to achieving the United Nations Sustainable Development Goals (SDGs).

Speaking on the development, Jonny Baxter, the British Deputy High Commissioner in Lagos, praised the listing as a milestone in the UK-Nigeria development partnership. He emphasized that InfraCredit’s success illustrates the potential of public markets to mobilize domestic capital at scale. “InfraCredit’s journey shows the strength of long-term partnerships. With MOBILIST’s support, Nigerian investors now have a reliable pathway to fund the capital needs of local infrastructure developers, while contributing to national growth,” he said.

InfraCredit’s CEO, Chinua Azubike, described the listing as a pivotal moment in the institution’s evolution. He reiterated the company’s commitment to deepening Nigeria’s capital markets and unlocking access to long-term, local-currency financing for infrastructure. “This transition into a publicly listed company is not just about growth—it’s about building trust, widening our ownership base, and reinforcing our mission to support sustainable development through infrastructure financing,” Azubike noted.

Founded in 2017 by GuarantCo—a member of the Private Infrastructure Development Group (PIDG)—and the Nigerian Sovereign Investment Authority (NSIA), InfraCredit was created to address the absence of long-term financing solutions in Nigeria’s debt capital markets. Since its inception, it has become a model for similar institutions, such as InfraZamin in Pakistan and Dhamana in Kenya. Its capital base was further strengthened in 2020 when InfraCo Africa, another PIDG company, joined as an investor.

InfraCredit’s growing influence is supported by strong international partnerships, including strategic alliances with British International Investment (BII) and Financial Sector Deepening Africa (FSDA)—both of which are UK-backed organizations committed to advancing development finance across Africa.

As Nigeria seeks to close its infrastructure gap and move toward a more resilient, sustainable economy, InfraCredit’s transformation into a publicly listed entity may represent not only a significant institutional evolution but also a blueprint for mobilizing local capital to solve Africa’s long-term development challenges.

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InfraCredit, a leading infrastructure credit guarantee institution, has announced the credit enhancement of Prado Power Limited’s Guaranteed Fixed-Rate Senior Green Infrastructure Forward Ijarah Lease Sukuk.

This milestone initiative is part of a co-financing arrangement with the £10 million Climate Finance Blending Facility (Facility) funded by the United Kingdom Foreign, Commonwealth, and Development Office (FCDO).

The transaction, the fourth under the Climate Facility, introduces Nigeria’s first blended local currency Green Sukuk, financing a solar-powered rural infrastructure project.

The 7-year Guaranteed Fixed-Rate Sukuk will support the construction, installation, and commissioning of four solar-hybrid mini-grids with a total capacity of 850 kWp across Akwa Ibom and Benue states.

InfraCredit’s Clean Energy Funding Programme (CEFP) is designed to de-risk and mobilize domestic investments in clean energy projects. The blended financing structure combines InfraCredit’s “AAA”-rated guarantee and first-loss capital from the Facility to reduce project costs and enable the development of sustainable energy solutions.

The project aims to electrify 15,801 unserved households and small businesses, create 242 jobs, and reduce greenhouse gas emissions by 893.53 tonnes annually. The initiative aligns with Nigeria’s universal electrification goal by 2030, the Sustainable Development Goal 7 (affordable and clean energy), and the country’s net-zero emissions target by 2060.

Speaking on the transaction, Prado Power CEO, Mr. Washima Mede, expressed gratitude for the support, emphasizing the socio-economic benefits of the project. “This initiative enhances livelihoods, job creation, and sustainable energy access for rural communities,” he said.

The Managing Director of the Rural Electrification Agency (REA), Mr. Abba Aliyu, hailed the transaction as a transformative step in closing Nigeria’s energy access gap. He noted, “This innovative financing model highlights the potential of decentralized renewable energy solutions in driving sustainable development.”

Green Sukuk, a Shari’ah-compliant finance instrument, offers an eco-friendly investment platform for projects addressing climate change. The instrument has been certified green by the Climate Bonds Initiative and verified by Agusto & Co.

InfraCredit CEO, Mr. Chinua Azubike, highlighted the role of Green Sukuk in energy transition and job creation. “We are proud to develop Islamic finance products that unlock investments for clean energy while addressing energy poverty in Nigeria,” he stated.

The initiative benefited from technical, legal, and environmental due diligence supported by FSD Africa under a Technical Assistance Agreement. The World Bank Nigeria Electrification Project, administered by the REA, further validated the project.

This landmark transaction underscores InfraCredit’s commitment to innovative financing models, leveraging partnerships to advance Nigeria’s renewable energy goals and socio-economic development.

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The $15 million facility aims to strengthen InfraCredit’s capital base and support its mission to bridge Nigeria’s infrastructure financing gap. This funding will enhance private sector financing for critical infrastructure projects across sectors such as power, renewable energy, telecommunications, healthcare, green housing, and transportation. As a result, InfraCredit’s funded capital base will increase to $187 million (approximately N264 billion).

Mr. Lamin Barrow, Director General of the AfDB Group, expressed satisfaction with this operation. At the signing ceremony, he stated, “Our support to institutions such as InfraCredit demonstrates the importance of promoting innovative and scalable solutions to leverage pools of capital from domestic institutional investors. This positions local capital markets as viable alternative sources of long-term funding to bridge the continent’s huge infrastructure deficit.”

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The investment underscores AfDB’s confidence in InfraCredit’s robust business fundamentals and commitment to sustainable development. By leveraging domestic capital markets, InfraCredit aims to deepen the local debt capital market, attract long-term investors, and foster economic growth. This investment aligns with AfDB’s support for InfraCredit’s Clean Energy Transition Strategy and Roadmap, as well as its green finance achievements. It reflects AfDB’s commitment to promoting low-carbon development and climate mitigation by leveraging private sector climate finance.

Over the past seven years, InfraCredit’s guarantees have facilitated access to NGN 218 billion ($445 million) in local currency finance for 12 first-time issuers and over 20 infrastructure projects. InfraCredit supported Nigeria’s first 15-year green infrastructure bond and extended corporate bond tenors to 20 years, beyond market norms.

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InfraCredit’s CEO, Chinua Azubike, commented, “We are delighted by AfDB’s confidence in our business model, which has successfully facilitated private sector investment in impactful infrastructure projects. Despite challenging market conditions, we have demonstrated strong fundamentals, solid portfolio performance, and profitability.”

The additional capital from AfDB will bolster InfraCredit’s ability to support access to long-term local currency domestic credit for its rapidly growing pipeline of infrastructure projects, currently worth over NGN 839 billion ($579 million). This will foster job creation and economic growth in Nigeria.

Mr. Solomon Quaynor, AfDB’s Vice President for Private Sector, Infrastructure, and Industrialization, added, “The success of InfraCredit has inspired the replication of its business model across the continent, a key part of our strategy for scaling up private sector financing in Africa. This is evidenced by our support for establishing a similar institution in Kenya covering the East Africa region.”

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Further to this new equity investment, InfraCredit’s paid-in capital base will increase to $175.14 million (N148.55 billion) translating to an aggregate guarantee issuing capacity of up to N742.77 billion (c.USD 875.7 million). The equity investment will be part of InfraCredit’s core capital and will enhance InfraCredit’s guarantee issuing capacity to sustain InfraCredit’s ‘AAA’ credit rating. It will also result in the diversification of InfraCredit’s ownership structure in line with its envisioned capital structure. InfraCredit would continue to deploy innovative credit enhancement solutions in mobilising private sector financing for infrastructure projects in key sectors of the Nigerian economy.

Established in 1963, AIICO Insurance is one of the largest life insurers in Nigeria and a major underwriter for general insurance by premiums written.

Speaking on the investment, CEO, AIICO Insurance, Babatunde Fajemirokun said, this investment is the evolution of “what we at AIICO Insurance believe will be a long-term partnership with InfraCredit. Over the past two years, AIICO Insurance has invested in InfraCredit guaranteed bonds, and participated in novel financing arrangements promoted by the company to bring infrastructure investment to areas that have been significantly underserved.

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“With this investment, AIICO Insurance underscores its commitment to bridging the infrastructure gap in the country, partnering with InfraCredit for the long haul.”

Welcoming AIICO as a new shareholder of InfraCredit, chairman of the InfraCredit, Sanjeev Gupta, said, AIICO’s investment is in line with its vision of creating a strong partnership between the public and private sectors, adding that, this partnership aims to attract private sector capital for infrastructure financing in a sustainable manner, saying, this investment marks another significant turning point and a significant milestone for InfraCredit, as it aim to increase private sector involvement in the ownership structure.

Commenting on the new equity investment, the chief executive officer(CEO), InfraCredit, Chinua Azubike stated that the admission of AIICO Insurance, the second private domestic institutional investor in InfraCredit, reinforces the confidence in the sustainability of InfraCredit’s unique business model.

To him, “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. This equity investment from AIICO aligns with our sponsor’s strategic objective to broaden our investor base through private sector participation, thus expanding our capitalisation and strengthening our capacity to deepen market penetration.

“We are pleased to have AIICO as a shareholder, and we aim to strengthen our cooperation towards advancing sustainable finance for impactful Infrastructure projects in Nigeria.”

Source: Leadership NG

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