The Nigerian Infrastructure Credit Enhancement Facility (InfraCredit) is a specialised institution that provides NGN-denominated guarantees to enhance the credit quality of local currency debt instruments issued to finance infrastructure projects in Nigeria.
InfraCredit: Making infrastructure projects in Nigeria more bankable through credit enhancement
Abstract
Nigeria’s infrastructure finance gap is estimated to be over USD 3 trillion over the next 30 years. While long-term patient capital is key to progressing infrastructure projects, accessing such funds in Nigeria can be challenging. Companies have struggled to issue bonds on Nigeria’s capital markets which meet the high credit rating requirements of institutional investors such as pension funds and insurance companies. Nigerian pension funds are authorised to invest up to 35% of their assets in corporate bonds, including 15% in infrastructure bonds, which translates to about USD 6 billion in Nigerian Naira (NGN) equivalent. Despite this, they used to have almost no investment in that asset class compared to the industry’s total assets under management. This is primarily because these institutional investors had traditionally been unfamiliar with the infrastructure asset class, having concentrated their investments primarily in federal government securities and therefore being reluctant to take on credit risk for infrastructure projects.
The Nigerian Infrastructure Credit Enhancement Facility (InfraCredit) is a specialised institution that provides NGN-denominated guarantees to enhance the credit quality of local currency debt instruments issued to finance infrastructure projects in Nigeria. PIDG partnered with the Nigeria Sovereign Investment Authority to establish InfraCredit in 2017, with an initial contingent capital of USD 25 million via its guarantee solution, GuarantCo. In 2020 PIDG invested an additional US$27 million equity investment through its project development arm, InfraCo, significantly increasing InfraCredit’s total capital base—both paid-in and callable. This, in turn, enabled InfraCredit to attract additional forms of capital and build a more robust balance sheet to underwrite long-term local currency guarantees.
Since its establishment, InfraCredit has (as of 31 Dec 2024) successfully guaranteed 24 transactions mobilising over NGN 200 billion in private investment with tenors of up to 20 years and crowding in over 21 domestic institutional investors – around 60% of total pension fund assets in the country. Of this total, InfraCredit has supported nearly NGN 150 billion worth of bond issuances, with an average tenor of 11 years, compared to the market average tenor of 3.2 years achieved in the Nigerian Market without InfraCredit support. Institutional investors made up the majority of participants in these issuances, with Pension Funds accounting for more than half (56.16%) of the total. Other key contributors included banks, insurance companies, fund managers and trustees. These transactions have been made across sectors, i.e. renewable energy, off-grid power, transport and logistics, telecommunications and other sectors contributing to infrastructure development. Most of these projects had first-time access to local currency finance of up to 20-year tenor from the domestic bond market.
The guarantees provided by InfraCredit have created new markets. For example, in February 2019, with InfraCredit’s guarantee, North South Power tapped the local debt capital markets as a first-time issuer to raise NGN 8.5 billion via bonds (AAA-rated). The transaction constituted the first certified corporate green bond and the longest tenored (15-year) corporate bond issued in the Nigerian debt capital markets. In 2021, North South Power successfully completed a second infrastructure issuance of NGN 6.325 billion. On this occasion, the company was able to leverage its track record and strong credit history supported by InfraCredit’s guarantee of its first issuance, and did not require a guarantee again.
InfraCredit has reported a consistent year-on-year growth and a 1,000% growth over the 2017-2022 period in its net investment income and net guarantee income. Fundamental to its growth is InfraCredit’s theory of change, which hinges on three pillars: i) expanding the market for infrastructure finance; ii) enabling projects to access longer tenor capital and have a high impact, and iii) delivering greater access to infrastructure for improved livelihoods for end users. All three pillars are designed to deliver impact that is assessed using specific and measurable outcome indicators. These include gender equality, decent work and economic growth. Over 1,000 small and medium-sized enterprises have been supported, while over one million people have benefited from improved access to infrastructure. InfraCredit expects to grow to USD 500 million by 2026.
Following the successful launch of InfraCredit Nigeria, PIDG partnered with Karandaaz Pakistan to launch InfraZamin Pakistan in 2021, and with the African Development Bank to launch the Dhamana Guarantee Company in Kenya in December 2024. In 2025, PIDG and the Credit Guarantee Corporation of Cambodia (CGCC) signed a Framework Agreement as part of the PIDG Credit Enhancement Facility (CEF) initiative. The initiative seeks to accelerate the development of domestic capital markets and enhance financial inclusion by developing onshore guarantee capability. The Framework Agreement encompasses counter- and co-guarantee support from PIDG’s guarantee arm, GuarantCo, and technical assistance from PIDG Technical Assistance to help boost CGCC’s capacity.
Other markets currently being worked on include Vietnam, Ghana and Francophone West Africa; other countries in Asia and sub-Saharan Africa are also under review. PIDG and the African Development Bank Group signed an agreement in May 2025 to work together to unlock long-term local currency capital for energy, infrastructure, industrialization, housing and other productive sectors across Africa. The collaboration aims to develop de-risking and credit enhancement solutions to tap into Africa’s vast pool of domestic capital - including sovereign wealth funds, pension schemes, insurance assets and other savings vehicles - estimated at over USD 2 trillion. This initiative takes on added urgency amid ongoing global economic and political uncertainty.
The implications of InfraCredit extend well beyond the Nigerian infrastructure market. InfraCredit represents a transformational model for how blended finance, local capital markets and institutional investors can be leveraged to unlock long-term, local currency financing in EMDEs. InfraCredit demonstrates that pension funds and other institutional investors in EMDEs can be mobilised when credit risk is shared; it shows how infrastructure investment can be unlocked at scale; and it shows how the model can be replicated in other countries. PIDG’s priority to mobilise private debt in low- and middle-income countries thus continues to drive efforts for developing more domestic guarantee companies that issue local currency credit guarantees. InfraCredit is more than a financing tool; it is a systemic enabler that demonstrates how local capital markets can fund long-term infrastructure, deepen financial ecosystems and deliver sustainable development outcomes in EMDEs.
This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Member countries of the OECD.
This can include intellectual or funding contributions.
This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
Note by the Republic of Türkiye
The information in this document with reference to “Cyprus” relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Türkiye recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Türkiye shall preserve its position concerning the “Cyprus issue”.
Note by all the European Union Member States of the OECD and the European Union
The Republic of Cyprus is recognised by all members of the United Nations with the exception of Türkiye. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.
Kosovo: This designation is without prejudice to positions on status, and is in line with United Nations Security Council Resolution 1244/99 and the Advisory Opinion of the International Court of Justice on Kosovo’s declaration of independence.
Photo credits: © imagedepotpro/gettyimages.
© OECD 2025
Attribution 4.0 International (CC BY 4.0)
This work is made available under the Creative Commons Attribution 4.0 International licence. By using this work, you accept to be bound by the terms of this licence (https://creativecommons.org/licenses/by/4.0/).
Attribution – you must cite the work.
Translations – you must cite the original work, identify changes to the original and add the following text: In the event of any discrepancy between the original work and the translation, only the text of original work should be considered valid.
Adaptations – you must cite the original work and add the following text: This is an adaptation of an original work by the OECD. The opinions expressed and arguments employed in this adaptation should not be reported as representing the official views of the OECD or of its Member countries.
Third-party material – the licence does not apply to third-party material in the work. If using such material, you are responsible for obtaining permission from the third party and for any claims of infringement.
You must not use the OECD logo, visual identity or cover image without express permission or suggest the OECD endorses your use of the work.
Any dispute arising under this licence shall be settled by arbitration in accordance with the Permanent Court of Arbitration (PCA) Arbitration Rules 2012. The seat of arbitration shall be Paris (France). The number of arbitrators shall be one.
