The Central Bank of Nigeria (CBN) has said between N8 trillion and N9 trillion of the N15 trillion needed to effectively fund infrastructure projects under the Infrastructure Corporation of Nigeria (InfraCorp) will come from banks, pension assets and Eurobond.

CBN Governor and Chairman of InfraCorp, Godwin Emefiele, announced the plan yesterday during the signing of Term Sheet between the four asset managers and InfraCorp in Lagos.

The Infrastructure Asset Managers that signed the Term Sheet included AAA Consortium, Chapel Hill Denham, Africa Infrastructure Investment Managers and Sanlam Infraworks.

Emefiele also mentioned that the first phase of the projects would kick off in Lagos, Abuja-Kaduna-Kano Road and the 2nd Niger bridge projects.

He said that the apex bank and Infracorp will be working with four independent asset managers to deliver major infrastructure projects in the country.

Emefiele disclosed that the first phase of the infrastructure financing would be to raise N14 trillion debt and N1 trillion equity which is being contributed by the CBN, Africa Finance Corporation (AFC) and Nigeria Sovereign Investment Authority (NSIA).

He said: “We are happy that we have reached a stage where we are signing the terms sheet between InfraCorp and our four assets managers.

“Today marks a major milestone as InfraCorp and the Infrastructure Asset Managers have concluded the initial discussions on how they will operate together to deliver infrastructure to the nation”.

“The first phase of this financing is to raise N14 trillion debt plus N1 trillion equity which is being contributed by the CBN, Africa Finance Corporation (AFC) and Nigeria Sovereign Investment Authority (NSIA). We believe that a substantial portion of the N15 trillion is available locally.

“There is a lot of liquidity today not just in the banking industry, there is a lot of liquidity that is currently held by our pension funds managers.”

Continuing, Emefiele said: “I understand from last count that the size of Nigeria pension fund is over N13 trillion. I am told that in another three to five years, Nigerian pension assets will rise to almost N20 to N25 trillion.

“In other countries where infrastructure corporations have worked, Pensions funds have been used to develop infrastructure of those countries.

“What we are trying to say here is that there is a lot of local capital and liquidity in Nigeria and we would begin by talking to people, the institutions that have this liquidity to come in and take up this kind of debt.

“We are determined to see to it that from today InfraCorp is open for business. From today, we are unveiling InfraCorp to Nigeria and because we are sure, we are confident that the funding of N15 trillion is available,” he said.

InfraCorp will, at its inception, be working on the Lagos-Ibadan Expressway, the Abuja-Kaduna-Kano and the 2nd Niger bridge projects.

He, however, noted that the projects to be embarked on will be commercially viable, saying: “most of the roads will be carrying the traffic cam, they would be tolled but we will try as much as possible to ensure that the tolls are not too high and becomes so burdensome on the road users.

“The important thing I think is, we must begin to come to a realisation that, for us to have good infrastructure and good roads, you will need to make them commercially viable and to make them commercially viable means we have to pay for them and Nigeria is not the only country where pedestrian roads or rails or airports are made commercially viable.

“We are putting private sector capital here and we need to ensure that those capital will be returned back the way it should be returned to the providers of capital.”

Chief executive of InfraCorp, Lazarus Angbazo, said: “The mission of the InfraCorp is to become a world class infrastructure development and investment vehicle focused on providing debt and equity capital from local and international sources for the development and operationalization of the infrastructure that Nigeria deserves.

“The specific mission of InfraCorp is to harness opportunities for infrastructure development in Nigeria by originating structuring, executing and managing end-to-end bankable projects.

“These projects would be managed privately by asset managers that are private entities and they would do this in partnership with public and private sector participants to provide long and attractive investment returns required not just in terms of financial returns but also in terms of social impact.”