* Sign terms with four asset managers
The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, yesterday announced that the Infrastructure Corporation of Nigeria (InfraCo) would release N8 trillion in pension fund assets to be deployed in bankable infrastructure projects in across Nigeria. Emefiele also announced the appointment of Mr. Lazarus Angbazo as Managing Director of InfraCo and signed an agreement with four infrastructure asset managers – AAA Consortium, Chapel Hill Denham, Africa Infrastructure Investment Managers and Sanlam Infra works.
Infracorp is promoted by the Africa Finance Corporation (AFC) and the Nigerian Sovereign Investment Authority, with KPMG as transaction advisers. In addition, together with their legal advisers – Kenna Partners, Olaniwun Ajayi and Ukiri and Lijadu – they are to provide InfraCo as a catalyst to accelerate public-private solutions for infrastructure in Nigeria, with an initial fundraising of 15 trillion USD. naira. During a press briefing in Lagos yesterday, Emefiele said:
“We have done our scoping, we believe a substantial part of the trillion naira is available locally. There is a lot of liquidity today, not just in the banking sector; there is a lot of cash currently held by our pension fund managers. From the latest count, I understand that the size of the Nigerian pension fund exceeds N13 trillion. I am told that in three to five years, Nigerian pension assets will grow to nearly 20 trillion to 25 trillion naira.
“There is a lot of local capital and liquidity in Nigeria and what we would like to say is that we would start by talking to the people, the institutions that have that liquidity to come in and take on that kind of debt and that is why I am trying to say that of the 14 trillion naira that will be debt we imagine looking at it in a straight line we should be looking at the 8-9 trillion naira available say within the Nigerian banking sector and pension fund administrators.
“And of course, naturally, the rest will be raised by foreign debt like Eurobond and the rest. So, yes, there will be Eurobonds, but because we are moving very quickly, very quickly, we will look at more of that at the Nigeria.” So let’s not forget that these are projects from a viability perspective and they will generate revenue in Naira. . Most of the roads will carry the traffic camera, they will be chargeable but we will try as much as possible to ensure that the tolls are not too high and become so burdensome for road users.
“The important thing, I think, is that we have to start realizing that for us to have good infrastructure, for us to have good roads, we’re going to have to make it commercially viable and that means we really have to pay for it.” Talking in more detail about how InfraCo would be funded, Emefiele said the first phase of this funding is to raise N14 trillion in debt plus N1 trillion in equity, which is provided by the CBN, l ‘AFC and NSIA. He added, “After signing the term sheet today, we will go straight into execution mode because Nigeria really needs to develop its infrastructure.
There is an infrastructure deficit in the public sector, there is an infrastructure deficit in the private sector and we would like to see that we have played our part at this time to support the efforts not only of the government but also of the sector private sector by doing all that can be done to develop infrastructure in Nigeria. “We are determined to do this because we all travel to different parts of the world and we see the state of development of their infrastructure and indeed most of the developing countries that we like to compare ourselves with also have some kind of our type of InfraCo and that is why they have taken very aggressive measures to develop infrastructure in these countries.
We are determined to ensure that from today InfraCo is open for business. “As of today, we are unveiling InfraCo in Nigeria and because we are confident, we are confident that the N15 trillion financing is available.” In other countries where infrastructure corporations have operated, pension funds have been used to develop the infrastructure of those countries.
“Emerging market economies have used private sector funds from either pension fund managers or the banking sector to set an example that we here in Nigeria are ready to support infrastructure development, support the government in the development of Nigerian infrastructure, and it is our solemn promise today that we will do so.
I am so sure with the gap in the Nigerian infrastructure, this is the first tranche and I think it will soon be exhausted very quickly and now we can go to a phase two and a phase three. “Nigeria as the largest economy in Africa and a country with the largest population in Africa truly deserves this at this time. Its infrastructure must be top notch in order to continue to encourage local and foreign investors to have confidence to come and do business in Nigeria.” For his part, Angbazo said:
“InfraCo’s specific mission is to exploit infrastructure development opportunities in Nigeria by originating, structuring, executing and managing end-to-end bankable projects. These projects would be privately managed by asset managers who are private entities and they would do so in partnership with public and private sector actors to provide long and attractive returns on investment, necessary not only in terms of financial return , but also in terms of social impact. “InfraCo is a dedicated vehicle to unlock and enable infrastructure development.
It is a catalyst to unlock private capital by leveraging local and international capital pools and ultimately it is a catalyst for economic growth and development by stimulating local capacity building, inclusive growth and development with impact.