UK Supports Green Infrastructure In Nigeria

The backstop facility is intended to unlock local currency funding.

By Liz Bains on
3rd August 2023

The UK government-backed FSD Africa Investments (FSDAi), in partnership with Lagos-based InfraCredit, has invested £10 million (US$12.7 million) into a risk-sharing backstop facility (RSBF), designed to unlock local currency funding for sustainable infrastructure development in Nigeria.

The facility will mobilise local institutional investment via bonds into viable early-stage or greenfield climate-aligned infrastructure projects ranging from distributed renewable energy services for urban residences, to commercial and industrial renewable projects, edge-certified green housing and e-mobility infrastructure.

The RSBF will raise funding in series, initially from FSDAi, and eventually from other funders, aiming to reach a total capital base of up to US$50 million. 

FSDAi said that by increasing the accessibility of finance for climate-aligned infrastructure projects, the RSBF will help Nigeria accelerate its social and economic development, green economic transition and deliver on its climate goals.

The company’s chief investment officer, Anne-Marie Chidzero added: "FSDAi’s partnership with InfraCredit on the bridge-to-bond facility introduces a derisking financing solution to mobilise short and medium-term local institutional investment into critically needed infrastructure projects that are currently considered unbankable without alternative credit enhancement.” 

FSDAi is the investment arm of FSD Africa, which is funded by the UK government.

InfraCredit is a credit guarantee institution established to promote long-term local currency financing for infrastructure in Nigeria.

Photo: Lagos, Nigeria (© Billkret | Dreamstime)

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