ATIDI provides counter guarantee to InfraCredit for Bond, Debt Finance in Nigeria
The African Trade & Investment Development Insurance (ATIDI), a leading pan African multilateral Insurer, announced the issuance of a portfolio counter guarantee cover valued at USD41 million to InfraCredit in Nigeria.
InfraCredit a AAA-rated specialized infrastructure credit guarantee institution in Nigeria that provides local currency guarantees aimed at enhancing credit quality of debt instruments issued to finance creditworthy infrastructure assets in Nigeria.
This was contained in a statement issued by Mike Omuodo of Media Fast PR Firm and made available to this medium that the move underscores ATIDI’s commitment to bolstering infrastructure financing initiatives in Africa’s largest economy.
Commenting on ATIDI’s commitment to supporting risk mitigating associated with infrastructure financing ATIDI CEO Manuel Moses said the move was vital in catalyzing investment and fostering development in a vital sector.
“The portfolio counter guarantee provides a vital layer of protection, instilling confidence among investors and stakeholders while enabling InfraCredit to expand its reach and impact in facilitating access to affordable financing for critical infrastructure projects nationwide. This collaborative effort underscores the shared vision of ATIDI and InfraCredit in driving sustainable growth, enhancing resilience, and advancing Nigeria’s infrastructure development agenda,” Mr. Manuel said.
ATIDI’s portfolio counter guarantee cover reinforces its role as a key player in mitigating risk and catalyzing investment in critical infrastructure projects across the country. This collaborative effort between ATIDI and InfraCredit signifies not only a significant milestone in promoting sustainable economic development and fostering resilience within Nigeria’s infrastructure sector, but will also directly support development of Nigeria’ s capital and debt markets, by enabling issuance of local currency guarantees and catalyzing investment interest from pension funds, insurance firms and other long-term investors.
Nigeria, an African economic powerhouse and home to a vibrant private sector, stands poised for significant strides in infrastructure development and economic growth. The partnership between ATIDI and InfraCredit will strengthen the country’s infrastructure financing landscape. By leveraging ATIDI’s insurance expertise and InfraCredit’s proven track record in infrastructure credit enhancement, the partnership aims to unlock capital and facilitate access to affordable financing for critical infrastructure projects across the country.
“We are proud of the growth of our partnership with ATIDI, through this second risk sharing transaction, a first of its kind local currency portfolio counter-guarantee transaction, which will enhance InfraCredit’s capacity to issue more guarantees that will reduce the cost of capital and crowd in larger scale domestic credit, particularly from local pension funds and insurance investors to finance infrastructure development in Nigeria. Our partnership with ATIDI is a strong demonstration of the vital role multilaterals can play to help borrowing countries’ debt levels remain sustainable, by leveraging their balance sheets as risk sharing partners working alongside local institutions, to mobilise domestic resources from the private sector to finance infrastructure development in local currency whilst deepening domestic debt capital markets for sustainable development,” CEO, InfraCredit CEO Chinua Azubike said.
Nigeria joined ATIDI in 2019. The country’s membership in ATIDI, further amplifies not only the benefits of ATIDI’s insurance support, boosting Foreign Direct Investment (FDI) and cross-border trade but also enhancing the country’s economic growth and stability. Since inception, ATIDI’s portfolio represents a total gross exposure of over USD 1.3Bn, unlocking investment and trade volume amounting to over USD 16Bn in the sectors of Energy and Gas, Finance & Insurance, Construction, Agriculture, Information and Communication and Mining and Quarrying.
ATIDI was founded in 2001 by African States to cover trade and investment risks of companies doing business in Africa. ATIDI predominantly provides Political Risk, Credit Insurance and, Surety Insurance. Since inception, ATIDI has supported USD85 billion worth of investments and cross border trade into Africa. For over a decade, ATIDI has maintained an ‘A/Stable’ rating for Financial Strength and Counterparty Credit by Standard & Poor’s, and in 2019, ATIDI obtained an A3/Stable rating from Moody’s, which has now been revised to A3/Positive.
InfraCredit is a ‘AAA’(NG) rated specialised infrastructure credit guarantee institution backed by the Nigeria Sovereign Investment Authority, GuarantCo (a Private Infrastructure Development Group company), KfW Development Bank, Africa Finance Corporation, InfraCo Africa and African Development Bank, to provide local currency guarantees and mobilise long term debt financing for infrastructure in Nigeria. InfraCredit’s guarantees act as a catalyst to attract domestic credit from pension funds, insurance firms and other long-term investors into credit-worthy infrastructure projects, thereby deepening the Nigerian debt capital markets. InfraCredit operates on a commercial basis with a developmental role and benefits from private sector governance.
InfraCredit maintains the highest domestic financial strength ratings accorded to any financial institution by Agusto and Co. and Global Credit Ratings Co., two of the major domestic credit rating agencies.
