Unleashing Local Currency Funding for Climate-Aligned Projects
FSD Africa Investments, in collaboration with InfraCredit, has made a pioneering investment of £10 million in a Risk Sharing Backstop Facility (RSBF) aimed at unlocking local currency funding for sustainable infrastructure development in Nigeria.
The newly established RSBF addresses the pressing challenge of low credit enhancement by mobilizing local institutional investment through bonds for viable early-stage and green-field climate-aligned infrastructure projects.
Paving the Way for Social and Economic Development
By increasing the accessibility of finance for climate-aligned infrastructure projects, the RSBF is poised to catalyze Nigeria’s social and economic development, propel its green economic transition, and aid in achieving its climate goals.
UK International Development Backing
The UK International Development, through the Foreign, Commonwealth & Development Office (FCDO), is supporting the initiative led by FSD Africa Investments (FSDAi) and InfraCredit, adding credibility to the project’s vision.
InfraCredit’s current investments and project pipeline showcase the facility’s versatility, as it will support a broad range of projects, including distributed renewable energy services, green housing, and e-mobility infrastructure.
Funding Series to Reach Up to US$50 Million
The RSBF will be established in a series of funding rounds, beginning with the £10 million investment from FSDAi and eventually attracting more funders, with a target of up to US$50 million in total capital base.
This investment aligns with one of FSD Africa’s primary objectives – developing capital markets by addressing blockages within the system, thereby promoting sustainable economic growth.
UK Foreign Secretary Applauds Investment
UK Foreign Secretary, James Cleverly, praised the UK’s commitment to Nigeria’s transition to clean energy and expressed confidence that InfraCredit’s innovative approach would attract private sector capital for green infrastructure.
Anne-Marie Chidzero, Chief Investment Officer at FSD Africa Investments, expressed optimism about the bridge-to-bond facility’s potential to attract institutional investment for critical infrastructure projects that were previously considered unbankable.
InfraCredit’s Vision for Underfinanced Projects
Chinua Azubike, Chief Executive Officer of InfraCredit, expressed enthusiasm about working with FSDAi and highlighted the facility’s role in addressing Nigeria’s significant infrastructure challenges, such as an unstable energy mix and social inequality.
About FSD Africa Investments
FSD Africa Investments is a financial institution focused on promoting inclusive and sustainable financial systems in Africa. It is part of the larger Financial Sector Deepening Africa (FSD Africa) program, which is funded by the United Kingdom’s Department for International Development (DFID) and the Foreign, Commonwealth, and Development Office (FCDO).
The primary goal of FSD Africa Investments is to strengthen financial markets and services in Africa, particularly in underserved and low-income populations. They work with various stakeholders, including governments, regulators, financial institutions, and development organizations, to drive financial sector development and increase access to financial services for those who have been traditionally excluded.
FSD Africa Investments supports initiatives that enhance financial inclusion, promote responsible financial behavior, and boost sustainable economic growth across the African continent.
Through investments, technical assistance, and partnerships, FSD Africa aims to contribute to poverty reduction, job creation, and overall economic development in the region.