GuarantCo, which is a part of the Private Infrastructure Development Group, has provided counter-guarantee support of N20.23bn with a twenty-year tenor to the Lagos Free Zone Company. The support is for the company’s three guaranteed infrastructure bond issuances totalling N53bn. This transaction is part of a larger guarantee facility that is being fronted by Infrastructure Credit Guarantee Company Limited Nigeria to support the bond programme.
The Lagos Free Zone Company is owned and developed by Tolaram, and the funds raised through the bond issuance will be used for the continued development of the Lagos Free Zone. The Lagos Free Zone is being developed as the largest integrated port-based economic zone in Nigeria, and it will serve as the industrial and maritime hub for Nigeria and West Africa.
All three bond issuances have been fully guaranteed by InfraCredit, the Nigerian-based credit guarantor, which was set up in 2017 with the help of GuarantCo and the Nigerian Sovereign Authority. InfraCo Africa, another PIDG company, is also a shareholder in InfraCredit. To manage single obligor limits, InfraCredit initiated the counter-guarantee partnership with GuarantCo across all three bond series.
Ashish Khemka, the Chief Finance Officer of Lagos Free Zone, said that the support from GuarantCo and InfraCredit is valuable towards the common goal of realizing enabling infrastructure projects in emerging markets like Nigeria. The infrastructure development subsidiary of Tolaram, LFZC, is behind the Lagos Free Zone and Lekki Port projects.
Enterprises operating in the Lagos Free Zone will benefit from various policy incentives underpinned by the Nigeria Export Processing Zones (NEPZ) Act, which is the legislative framework applicable to free zones in the country. The Zone is equipped with a host of shared industrial infrastructure necessary for attracting investments from the leading trade partners of Nigeria.
Layth Al-Falaki, the CEO of GuarantCo, said that the company is delighted to have counter-guaranteed the bond issuance of Lagos Free Zone Company for the benefit of the economy and local people in Nigeria and West Africa. This is also the company’s first joint transaction with InfraCredit, which it and the Nigerian Sovereign Investment Authority helped set up in 2017.
Chinua Azubike, the CEO of InfraCredit, said that the counter-guarantee provided by GuarantCo to support the Lagos Free Zone Company will strengthen InfraCredit’s capacity to underwrite larger infrastructure projects and mobilize more domestic credit from local institutional investors to support impactful infrastructure projects in Nigeria that will support more jobs and accelerate economic growth.