FSD Africa Investments, in collaboration with InfraCredit, has infused £10 million into an innovative risk-sharing backstop facility, marking a pioneering step towards unleashing local currency support for sustainable infrastructure growth in Nigeria.
The inception of the Risk Sharing Backstop Facility (RSBF) is a strategic response to the prevailing challenge of limited credit enhancement. This initiative seeks to galvanize local institutional investments through bonds into viable early-stage or green-field projects aligned with climate goals.
The paramount significance of broadening financial accessibility for climate-aligned infrastructure ventures cannot be overstated. By bridging this financing gap, the facility is poised to expedite Nigeria’s socio-economic advancement, facilitate its transition to a more environmentally conscious economy, and make tangible progress towards its climate objectives.
This transformative endeavor is underpinned by support from the UK International Development through the Foreign, Commonwealth & Development Office (FCDO). FSD Africa Investments (FSDAi) takes pride in co-leading this £10 million investment alongside InfraCredit, a well-established player in the realm of sustainable infrastructure financing.
The spectrum of projects currently backed by InfraCredit underscores the diverse scope that this facility is set to encompass. From decentralized renewable energy solutions for urban households to commercial and industrial renewable initiatives, certified green housing, and infrastructure for electric mobility, the facility promises to underpin a wide array of ventures.
The trajectory of the RSBF envisions successive rounds of funding, initially anchored by FSDAi and progressively attracting other contributors, with the ultimate goal of amassing a capital base of up to US$50 million. This strategic investment seamlessly aligns with FSD Africa’s primary objective of nurturing capital markets by dismantling barriers within the system.
In summary, the collaboration between FSD Africa Investments and InfraCredit in establishing the Risk Sharing Backstop Facility presents a game-changing model that not only addresses the challenge of insufficient credit enhancement but also paves the way for sustainable infrastructure development, economic growth, and the fulfillment of climate ambitions in Nigeria.
August 2, 2023 Delino Gayweh Serrari Financial Analyst
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