For years, Nigerian businesses have faced a familiar challenge: finding long-term financing in naira to expand infrastructure, manufacturing and other productive activities. While Nigeria has a large pool of domestic institutional capital, particularly through pension funds and insurance companies, much of that money has traditionally been invested in government securities rather than corporate infrastructure. The Private Infrastructure Development Group (PIDG) has helped change that picture.
Through a combination of guarantees, equity investment, technical assistance and project development support, PIDG has helped Nigerian companies gain access to the domestic capital market. A key part of this effort has been the creation and support of InfraCredit, a specialised Nigerian credit-enhancement institution established with the Nigerian Sovereign Investment Authority (NSIA).
InfraCredit provides naira-denominated guarantees that improve the credit quality of infrastructure bonds. In practical terms, the guarantee reduces the risk faced by investors, making it easier for companies to raise long-term funding locally. PIDG initially provided $25 million in contingent capital through its guarantee arm, GuarantCo, while its project-development arm, InfraCo, later invested another $27 million to strengthen InfraCredit’s balance sheet and guarantee capacity.
The results have been significant. According to PIDG, InfraCredit has guaranteed more than 22 transactions worth over $120 million and attracted more than 20 domestic institutional investors. The broader PIDG-backed programme has helped Nigerian companies mobilise hundreds of millions of dollars from the country’s own capital markets, contributing to the reported $247 million raised by 24 companies.
One important example is North South Power. With an InfraCredit guarantee, the company raised ₦8.5 billion in 2019 through Nigeria’s debt capital market. The transaction became Nigeria’s first certified corporate green bond and, at the time, the country’s longest-tenored corporate bond, with a 15-year maturity. North South Power later returned to the market in 2021, raising another ₦6.325 billion without requiring a new guarantee.
Other sectors have also benefited, including renewable energy, transport, logistics and telecommunications. Lagos Free Zone Company, for instance, received support for infrastructure bond issuances totalling $65.5 million, helping finance the development of the Lagos Free Zone.
The significance of PIDG’s intervention goes beyond the money raised. By helping investors become more comfortable with infrastructure risk and demonstrating that Nigerian companies can successfully issue long-term local-currency debt, the organisation has contributed to a deeper domestic capital market.
Ultimately, PIDG’s approach illustrates the power of using development finance to unlock private and domestic capital. Rather than simply providing companies with funding, it has helped build mechanisms that allow Nigerian businesses to raise money at home, while giving local institutional investors new opportunities to finance infrastructure and economic growth.
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