The Federal Government is pursuing a fresh $500 million loan from the World Bank to support the creation of a new infrastructure financing platform aimed at attracting private investment into critical sectors of the economy.
According to project documents, the proposed facility forms part of a broader $3.85 billion infrastructure financing initiative known as the Nigeria Infrastructure Financing and De-Risking Platform for Growth and Jobs (INFRAGROW). The platform is designed to address Nigeria’s significant infrastructure funding gap and stimulate economic growth through increased private-sector participation.
The World Bank has scheduled a technical design review for January 2027, while approval of the proposed financing is expected in May 2027, shortly before the end of the current presidential term.
Under the arrangement, the Federal Ministry of Finance will serve as the borrower, while the Nigeria Sovereign Investment Authority (NSIA) will act as the implementing agency.
The proposed $500 million package consists of $400 million from the International Bank for Reconstruction and Development (IBRD) and $100 million from the International Development Association (IDA).
The World Bank estimates that Nigeria faces an annual infrastructure financing shortfall of about $100 billion, which continues to limit economic growth, competitiveness, fiscal sustainability and job creation.
To tackle the challenge, the INFRAGROW initiative will combine project preparation, risk-reduction mechanisms and institutional reforms designed to make infrastructure projects more attractive to investors.
The wider financing framework includes contributions from the NSIA, private investors, commercial lenders and international financial institutions. The NSIA is expected to provide $200 million in equity, while private-sector investors are projected to contribute a similar amount. Additional funding is expected through commercial debt and guarantee instruments.
The platform will operate through four specialised subsidiaries. These include a Project Preparation Facility to support feasibility studies and project design, a Viability Gap Fund to assist economically important projects with limited commercial returns, a Risk Capital Facility to provide patient capital for viable projects, and a Credit Guarantee Vehicle to reduce investor risks through various guarantee mechanisms.
The initiative will also support reforms aimed at strengthening public institutions responsible for developing, procuring and managing public-private partnership projects.
In addition, the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) are expected to play supporting roles through co-investment and political risk insurance arrangements.
However, the World Bank noted that the project carries significant environmental and social risks because it could finance major developments in sectors such as energy, transportation and water infrastructure. Potential concerns include land acquisition, community displacement, environmental impacts and occupational safety challenges.
The proposed programme is expected to mobilise private capital, improve infrastructure delivery and support long-term economic development while helping Nigeria narrow its infrastructure deficit.
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