FSD Africa Investments (FSDAi) and InfraCredit, have announced an approximate US$12.8mn investment into a risk-sharing backstop facility (RSBF) that will allow local currency funding for sustainable development in the country
The RSBF, backed by UK International Development through the Foreign, Commonwealth and Development Office (FCDO), will address the challenge of low credit enhancement by mobilising local investment via bonds into early-stage or green-field climate-aligned infrastructure developments.
James Cleverly, UK Foreign Secretary, remarked, “This investment further demonstrates the UK’s commitment and contribution to Nigeria’s transition to clean energy and builds on decades of UK leadership in mobilising support for climate-related infrastructure challenges.”
Anne-Marie Chidzero, chief investment officer, FSD Africa Investments, FSD Africa, added, “FSDAi’s partnership with InfraCredit on the bridge-to-bond facility introduces a de-risking financing solution to mobilise short- and medium-term local institutional investment into critically needed infrastructure projects that are currently considered un-bankable without alternative credit enhancement.
“Moreover, as Africa’s economies struggle to mobilise capital to develop key climate mitigation and sustainable power generation projects, this facility comes as a timely and much-needed intervention for Nigeria’s infrastructure landscape.’’
The RSBF will raise funding in series with a goal of reaching a total capacity base of up to US$50mn. This will be conducted through FSDAi and then, eventually, other funders.