NSIA ‘ll Expand Nigeria’s Financing Options – Orji
- Okays Investments In NIDF
BY COBHAM NSA, ABUJA – The Nigeria Sovereign Investment Authority (NSIA) declared investment interest in the Chapel Hill Denham Nigeria Infrastructure Debt Fund (NIDF) will further strengthen its strategy of enabling Nigeria pension funds’ effective participation in infrastructure development,
Chief Executive Officer and Managing Director of NSIA, Uche Orji said the plan is consistent with the Authority’s resolve and ‘commitment to stimulate and make available long-term Naira financing for development projects in the country.
The NIDF is managed by Chapel Hill Denham Management Limited and Orji said the venture also conforms to NSIA’s mandate of constantly developing and exploring opportunities to play a leading role in driving sustained economic development for the benefit of all Nigerians.
According to the NSIA Chief Executive, “We are pleased to support NIDF, as it is consistent with NSIA’s strategy of enabling Nigeria pension fund participation in infrastructure, makes available long-term Naira financing, and is led by a high-quality management team.”
He said the Authority is upbeat about the investment package that would expand the country’s funding options and therefore looking “forward to working with the NIDF team to ensure the fund grows through further institutional investor participation and access to high-quality investments.”
In his remarks, the Chief Investment Officer of NIDF and Chief Executive Officer of Chapel Hill Denham, Bolaji Balogun said “Mobilisation of domestic currency sources for funding infrastructure is critical for Nigeria, in order to meaningfully bridge the existing infrastructure deficit.”
He explained that “NIDF directs institutional investments into productive infrastructure assets, which have a positive development impact, through the multiplier effect on investments, economic growth and well-being of the population.”
Balogun assured that NIDF has the potential to mobilise a meaningful proportion of investments’ requirement, “by channelling the growing pension and insurance assets as well as other long-term pools of capital into infrastructure investment and financing”.
Also speaking, Chairman of NIDF’s Investment Committee, Philip Southwell stated that: “Historically, senior debt financing for infrastructure projects in Nigeria has been provided by commercial banks, financial institutions, export credit agencies and multilateral/bilateral investment agencies in US dollars with a substantial proportion in relatively short tenors.”
He said the NIDF has however changed that paradigm for Nigeria, maintaining that; “By listing the NIDF on the FMDQ Exchange in July 2017, we have created liquidity in an asset class that is inherently illiquid, strengthened the domestic capital markets and enabled a wider range of investors to invest in infrastructure”.
As a Nigerian domiciled close-ended fund, the NIDF is the first and only domestic currency, listed infrastructure debt fund across Africa. It is focused on mobilising domestic savings, mainly pension funds, life insurance companies, large corporate entities as well as family office groups, to invest in economically critical and financially viable infrastructure assets.
The fund supports traditional infrastructure sectors, such as transport, energy infrastructure, power, renewable energy, utilities, logistics and other Public-Private-Partnership (PPP) type investments, with Naira long-dated senior debt.
Essentially, NIDF is able to support these projects with long-term financing and in the process, generates superior risk adjusted returns for its investors.
