InfraCredi and ATI sign a memorandum of understanding as risk sharing partners
InfraCredit, a specialized credit guarantee institution for infrastructure in Nigeria, and the African Trade Insurance Agency (ATI), have signed a Memorandum of Understanding on cooperation as risk-sharing partners to unlock the access to long term debt financing in local currency for infrastructure development in Nigeria
In the MoU, InfraCredit and ATI will collaborate and work together as risk sharing partners within their respective mandates, policies, resources and instruments to provide credit guarantees, co-guarantees and counter- guarantees/reinsurance, where applicable, on the financing of eligible infrastructure. transactions.
To demonstrate the potential impact of their strategic partnership, InfraCredit and ATI recently entered into a risk-sharing agreement on a N10 billion ($24 million) infrastructure bond.
The bond was issued in February 2022 by a Nigeria-based digital telecommunications infrastructure company, an early 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% of the principal repayments of the bond to InfraCredit. The infrastructure bond was rated AAA by Agusto and Co and GCR, and was oversubscribed by national pension funds.
Speaking at the signing of the MoU in Nairobi, Kenya, InfraCredit’s Managing Director, Chinua Azubike said, “One of InfraCredit’s key strategies to address the large financing gap infrastructure in Nigeria is to increase our guarantee capacity through risk sharing. partnerships with development finance institutions like ATI, leveraging their ability to share our long-term risks.
ATI’s Managing Director, Manuel Moses, added that “Infrastructure development remains a major challenge in Africa, and ATI is delighted to enter into this partnership with InfraCredit. We intend to support the acceleration of investment across the sector, which is a foundation and catalyst for productivity and sustainable economic growth on the continent.