CBN To Provide N70% Of Seed Capital For Infrastructure Fund

…Appoints KPMG As Transaction Adviser

The Central Bank of Nigeria is to provide 70 per cent of the seed capital for the Infrastructure Fund, THE WHISTLER has learnt.

It was gathered that the balance of 30 per cent for tn seed capital would be raised by external manager.

President Muhammadu Buhari had last month approved N1trn ($2.5bn) of seed capital for the Infrastructure Corp. of Nigeria Ltd., which the CBN and its partners initiated last year.

The fund has been established to raise as much as N15trn for power, road and railway projects in Africa’s largest economy.

Already, the CBN has appointed KPMG LLP as transaction adviser for the newly set up infrastructure fund, according to the source.

The apex bank was said to have appointed KPMG after the consideration of bids by other firms which include PricewaterhouseCoopers LLP, Boston Consulting Group and McKinsey & Co.

The Interim board is to be made up of the NSIA Managing Director Uche Orji, the President of the African Finance Corporation Samaila Zubeiru, CBN Governor Mr Godwin Emefiele, and CBN Deputy Governor Kingsley Obiora.

Other board members include representative of the Minister of Finance, Budget and National Planning; representatives of the Governors and two independents representative (one from North and the other from South)

Nigeria is trying to boost investment in infrastructure to stimulate economic growth after exiting its second recession in four years in the fourth quarter.

The country needs at least $3trn over 30 years to close its infrastructure gap, according to Moody’s Investors Service

The CBN had in August 2020, secured the approval of the Federal Government to set up a N15trn infrastructure development company in collaboration with the Sovereign Wealth fund and African Finance Corporation to invest in the country’s critical infrastructure and transport network.

The company which is to be exclusively managed by an Independent Infrastructure Fund Manager is expected to leverage local and international funds, is projected to cover an initial 5-year period.

The Federal Government, last month began the process of engaging an asset manager for its newly set up Infrastructure Company of Nigeria Ltd. (Infra-Co), to raise funds for projects and accelerate growth in the country.

The Central Bank of Nigeria, the Africa Finance Corporation, and the Nigeria Sovereign Investment Authority have extended the deadline by two weeks for receipt of final proposals for the appointment of Asset Manager for the N15trn Infrastructure Corporation of Nigeria.

The deadline which was initially set for 12 noon Nigerian time on 16 March 2021 has been extended by 2 weeks to 12 noon Nigerian time on 30 March 2021.

The extension was confirmed by a statement signed on behalf of the Promoters by the CBN Deputy Governor, Economic Policy, Dr Kingsley Obiora.

It stated, “Reference is made to the request by the Promoters (the Central Bank of Nigeria, the Africa Finance Corporation, and the Nigeria Sovereign Investment Authority), for Expressions of Interest from qualified asset managers active in the infrastructure sector to manage the Infrastructure Corporation of Nigeria Limited (InfraCorp).

“This communique is to convey an extension to the deadline for receipt of final proposals in response to the detailed Request for Proposals (RfP) from 12 noon Nigerian time on 16 March 2021 by 2 weeks to 12 noon Nigerian time on 30 March 2021.

“The process remains the same such that upon expression of interest through [email protected], the Promoters shall share a detailed RfP document providing potential asset managers with the necessary information to prepare appropriate proposals in line with the Promoters’ requirements.”

The asset manager will be responsible for establishing a General Partner/Asset Manager organization, develop the consolidated business plan and financial model for InfraCorp and its subsidiaries.