Nigeria dangles $4bn petrochemical, gas projects before investors at Africa forum

Nigeria was in the hunt for over $4 billion (N1.2 trillion), to fund projects across petrochemicals, power, gas, property and infrastructure credit, at the inaugural Africa investment forum organised by the African Development Bank November 7-9 in South Africa.

The Forum, which attracted over 350 institutional investors and development finance institutions from 53 countries, concluded with five of Nigeria’s infrastructure deals advancing towards financial close, according to the project sponsors.

Stella Kilonzo, Senior Director, Africa Investment Forum (AIF) at the AFDB, said the Forum leveraged best practices from several countries, including the project preparation approach of Nigeria’s Economic Recovery and Growth Plan (ERGP) Focus Labs organised between March and May 2018 in Abuja.

“AIF found a very good model in Nigeria where bottlenecks were identified and resolved through the Presidency and several of the projects from the ERGP Focus Lab were taken forward,” Kilonzo added.

There were as many as 61 closed-door boardroom sessions between investors and project sponsors to de-risk and accelerate financing of the projects.

One of the projects on show was the $3 billion Brass Fertiliser and Petrochemical Development Company Limited, which Frank Nweke the project’s sponsor, said has a potential for creating 20,000 jobs.

Other projects that benefited from the investor rounds included Gas for Development (GFD) Limited’s gas commercialisation project off the Lagos coast, and Geometric Power in Aba, South-East Nigeria.

Geometric Power, a 1,080 megawatt power plant, is scheduled to commence its 500MW first phase in 2019.

Infrastructure Credit Guarantee Company Limited (InfraCredit), and Eko Atlantic City rounded up the projects.

InfraCredit is a specialised infrastructure credit enhancement facility established by the Nigeria Sovereign Investment Authority (NSIA) in collaboration with GuarantCo (a member of the Private Infrastructure Development Group, to provide guarantees that enhance the credit quality of local currency debt instruments issued to finance eligible infrastructure projects in Nigeria.

This month (November), the company announced the closing of a €31 million subordinated capital investment by its new investor, KfW, the largest Development Bank in Europe.

The Eko Atlantic project, Nigeria’s answer to Dubai, is a multibillion dollar residential and business development located as an appendage to Victoria Island that will be the size of Manhattan’s skyscraper district. It’ll be home to a quarter of a million people and employ another 150,000.

In a sign of the level of interest showed by investors in the projects, Tunji Adebayo, executive chairman of GFD Energy said his company’s boardroom session was oversubscribed.

“Over 60 investors were interested in our session, but we had to cut it down to 20,” Adebayo added. GFD Energy was out hunting for $USD1.3 billion.

Sponsors of Ibom Deep sea port, a project spearheaded by the Akwa Ibom government and the Federal government, were not present at the forum.

Mustafa Chike-Obi, an investment banker and former managing director of the Asset Management Corporation of Nigeria (AMCON), commended the rigour of the Forum and the high-level representation of the Nigerian government who demonstrated an understanding of the transactions and a remarkable, unwavering commitment to supporting credible private-sector projects across political regimes.

The Co-ordinator of Nigeria’s Economic Recovery and Growth Plan (ERGP) Implementation Unit and Senior Special Assistant to the President, Folarin Alayande, who facilitated some of the investor meetings, observed that Nigeria had the second largest project representation at the Africa Investment Forum and these were all infrastructure projects.

“The Forum was in some way a scaled-up and trans-border version of the ERGP Focus Lab, and we are glad that three projects out of the six short-listed for the Nigeria boardroom sessions at AIF were from the Focus Labs,” Alayande told Business Day.

“The Federal Government remains open to continuing these investment conversations even after the Forum,” he added.

The African Investment Forum is Africa’s largest transactional marketplace and featured investor dialogue sessions on the Africa Energy Marketplace with the Minister of Power, Works and Housing, Babatunde Fashola, and on Agribusiness Investments with the Honourable Minister of Finance, Zainab Ahmed