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Published On: Fri, Dec 19th, 2014

Bank partners U.K, Spain to float $500m Nigeria-Focused Infrastructure Fund

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By A’isha Biola Raji

The Infrastructure Bank Plc (TIB) is partnering Gemfonds of UK and Madrid-based Investment Banking firm, Sigrun, in setting up a $500 million Nigeria-focused Infrastructure Fund.

A statement by TIB in Lagos on Wednesday said the commercial agreement for the fund was executed at a ceremony in London on Dec. 5.

The Fund, which is to be named the Nigeria Infrastructure Fund 1 (NIF1) is being set up with the aim of investing in and lending to Greenfield and Brownfield Public Private Partnership projects primarily within the Nigerian infrastructure space.

“The objective of setting up the Fund is premised on the drive to bridge the mammoth infrastructure deficit in the country.

“TIB, in line with its mission to transform Nigeria’s infrastructure for enhanced productivity. has partnered with Gemfonds and Sigrun with a view to making a significant contribution towards improving Nigeria’s infrastructure base.

“In addition to the preservation of and return on investors’ funds, the NIF1 has the mandate to focus on projects with high potential for the promotion of inclusive growth and socio-economic development, with the resultant effect of reducing the cost of doing business and enhancing the quality of lives of the Nigerian masses.

“The Infrastructure Bank Asset Management Company Limited (TIBAML), a subsidiary of TIB, shall manage NIF1.

“TIBAML. under the guidance of its own management and Board of Directors will independently manage the Fund under recognised and acceptable global best practices.

“The opportunity to establish the Fund is underpinned by the ability of the partners to identify, structure and invest in long-term infrastructure projects that have the potential to generate stable, predictable, and recurring cash flow as well as ensure high returns with strong economic performance,” the bank said.

TIB said that the Fund would primarily focus on sectors such as transportation, municipal common services and utilities, power and renewable energy, oil and gas logistics services as well as real estate and telecommunications.

“The Fund shall invest a certain portion of its portfolio as equity/quasi-equity to attract other apposite capital instruments suitable for infrastructure development in an emerging market such as Nigeria.

“The Fund, under the TIBAML, is expected to commence full operations within the next six months in such transactions of strategic importance as providing a unique opportunity for local and international investors with an appetite for the infrastructure asset class in a Frontier Market.

“TIB envisages that the improvement in infrastructure that would be catalysed by the Nigeria Infrastructure Fund 1, coupled with the attendant multiplier effect from enhanced national infrastructure, would gear economic improvement and enhancement of Gross Domestic Product both in the medium, and long-term.

Speaking on the deal, Mr Adekunle AbdulRazaq Oyinloye, the Managing Director/CEO of TIB,said that: “the setting up of NIF1 – a landmark transaction within the infrastructure financing landscape- is another important step by The Infrastructure Bank Plc in its efforts to bridge the infrastructure gap across the country by attracting foreign and local investors”.

“The Fund has been structured to generate multiples of the initial Fund proceeds by providing risk capital and attendant equity and quasi-equity instruments that will catalyse and support the raising of appropriately priced debt instruments for infrastructure development in Nigeria.”

Daniel Broby, Gemfonds’ CEO said: “the infrastructure opportunity in Nigeria is self-evident.

“With the expertise and execution capabilities of NIF1, we believe that significant IRR’s can be achieved.

“We will create a feeder fund for Development Finance Institutions and international investors to participate alongside Nigerian investors in the exciting PPP and government championed infrastructure initiatives”

Speaking on the deal, José Altadill, the Director of Sigrun Africa, an afíliate of Sigrun Partners, one of the leading Infrastructure and energy firms worldwide, said that the group was very excited to work with TIB.

 

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