African Development Bank to invest US$ 10 million in Chapel Hill Denham Nigeria Infrastructure Debt Fund

The Board of Directors of the African Development Bank Group has approved a Naira investment equivalent to US$ 10 million in Chapel Hill Denham Nigeria Infrastructure Debt Fund (NIDF).

This investment aims to meet the country’s infrastructure investment needs, including in the power and energy infrastructure sectors. NIDF is the first and the only listed local currency infrastructure debt fund in Africa.

The transaction is financed through the Bank’s ordinary capital resources allocated for private sector operations financing. It is expected to deliver significant development outcomes – private sector development through support to industrialization and diversification from conventional oil and gas. It will also help to strengthen capital markets harness domestic financial resources to fund critical infrastructure and human development by providing and improving access to basic services.

The Bank Group’s investment in NIDF will significantly boost the country’s infrastructure stock, including increased clean gas distribution and power generation (including through renewable energy) capacities. NIDF will also target investments in other key infrastructure sub-sectors such as transportation and logistics. The fund will meaningfully contribute to inclusive growth by supporting infrastructure development in Nigeria, which faces significant infrastructure deficits. Consequently, the funding will help improve the quality of life and the business environment.

The Project is aligned with the African Development Bank’s New Deal on Energy for Africa and High 5 priorities, particularly “Light Up and Power Africa”, “Industrialize Africa” and “Improve the Quality of Life for the People of Africa”. The project is also aligned with the Bank’s Climate Change Action Plan. The private Sector Operations strategy emphasizes the provision of equity capital to catalyze and crowd-in financing from external parties, which the Fund will achieve by tapping into financing from local institutional investors such as pension funds, insurance companies and asset managers.

The Bank’s investment in the NIDF will catalyze private sector investments and is expected to unlock up to NGN134 billion from the private sector, especially from Pension fund administrators who have already invested NGN15.4 billion in NIDF. This is the first unit trust investment by the Bank, with expectations to replicate similar investments across the African continent.

Original source: AfDB
Published on 17 October 2018