Infrastructure Credit Guarantee Company Limited (InfraCredit) announced the successful closing of a €31 million (US$ 35.27 Million) subordinated capital investment by its new investor, KfW Development Bank (KfW).

InfraCredit is a specialized infrastructure credit enhancement facility established by the Nigeria Sovereign Investment Authority (NSIA) in collaboration with GuarantCo (a member of the Private Infrastructure Development Group (PIDG), to provide guarantees that enhance the credit quality of local currency debt instruments issued to finance eligible infrastructure projects in Nigeria.

KfW, the largest development bank in Europe and 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.

In pursuance of this joint objective, KfW is investing a 10-year €31,000,000 (USD Equivalent) subordinated unsecured capital in order to strengthen InfraCredit’s guarantee capacity, enable InfraCredit to achieve its targeted capitalisation and bolster its balance sheet. The investment is accompanied by 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.