InfraCredi, ATI sign MOU as risk-sharing partners

A specialised infrastructure credit guarantee institution in Nigeria, InfraCredit, and the African Trade Insurance Agency (ATI),  have signed a memorandum of understanding (MoU) on cooperation as risk-sharing partners to unlock access to long-term local currency debt financing for infrastructure development in Nigeria In the MoU, InfraCredit and ATI will collaborate and work together as risk-sharing […]

A specialised infrastructure credit guarantee institution in Nigeria, InfraCredit, and the African Trade Insurance Agency (ATI),  have signed a memorandum of understanding (MoU) on cooperation as risk-sharing partners to unlock access to long-term local currency debt financing for infrastructure development in Nigeria

In the MoU, InfraCredit and ATI will collaborate and work together as risk-sharing partners within the context of their respective mandates, policies, resources and instruments to provide credit guarantees, co-guarantees and counter-guarantees/reinsurance as applicable on eligible infrastructure financing transactions.

As a demonstration of the potential impact of their strategic partnership, InfraCredit and ATI recently entered into a risk sharing arrangement on a 10-year N10bn ($24m) infrastructure bond.

The bond was issued in February, 2022, by a Nigeria-based digital telecommunication infrastructure company, a first-time issuer in the debt capital market.

InfraCredit provided a first loss guarantee for the infrastructure bond, while ATI provided a second loss counter guarantee on 50 per cent of principal repayments on the bond to InfraCredit. The infrastructure bond was rated AAA by Agusto and Co and GCR, and was oversubscribed by domestic pension funds.

Speaking at the signing of the MoU in Nairobi, Kenya, the chief executive officer of InfraCredit, Chinua Azubike, said, “One of the vital strategies of InfraCredit towards addressing the significant infrastructure financing deficit in Nigeria is to grow our guarantee capacity through risk sharing partnerships with development finance institutions like ATI, by leveraging their capacity to share our long-term risks.”

The chief executive officer of ATI, Manuel Moses, added that, “Infrastructure development remains a major challenge in Africa, and ATI is enthused to enter into this partnership with InfraCredit. We intend to support the acceleration of investments across the sector, which is a bedrock and an enabler for productivity and sustainable economic growth on the continent.”