AIICO Insurance acquires 5% stake in InfraCredit

AIICO Insurance Plc says it has been admitted as the second private domestic institutional investor in InfraCredit, an infrastructure credit guarantee institution.

On Tuesday, Segun Olalandu, AIICO’s head, strategic marketing and communications department, said the company’s involvement represents five percent of the total share capital of InfraCredit.

Olalandu said the insurance firm will be joining Leadway Assurance Plc, which was the first private domestic institutional investor in InfraCredit.

“Further to this new equity investment, InfraCredit’s paid-in capital base will increase to US$175.14 million (c. NGN148.55 billion) translating to an aggregate guarantee issuing capacity of up to NGN742.77 billion (c.USD 875.7 million),” AIICO said.

“The equity investment will be part of InfraCredit’s core capital and will enhance InfraCredit’s guarantee issuing capacity to sustain InfraCredit’s ‘AAA’ credit rating. It will also result in the diversification of InfraCredit’s ownership structure in line with its envisioned capital structure.”

Speaking on the investment, Babatunde Fajemirokun, chief executive officer (CEO), AIICO Insurance, said the investment is the next step in the company’s long-term relationship with InfraCredit.  

“Over the past two years, AIICO Insurance has invested in InfraCredit guaranteed bonds, and participated in novel financing arrangements promoted by the company to bring infrastructure investment to areas that have been significantly underserved,” he said.

“With this investment, AIICO Insurance underscores its commitment to bridging the infrastructure gap in the country, partnering with InfraCredit for the long haul.”

On his part, Sanjeev Gupta, chairman of InfraCredit board of directors, said AIICO’s investment is in line with “our vision of creating a strong partnership between the public and private sectors”. 

“This partnership aims to attract private sector capital for infrastructure financing in a sustainable manner. This investment marks another significant turning point and a significant milestone for InfraCredit, as we aim to increase private sector involvement in the ownership structure,” he said. 

Also commenting on the equity investment, Chinua Azubike, InfraCredit CEO, said the admission of AIICO Insurance underlines the confidence in the sustainability of the company’s unique business model.

“AIICO’s equity investment further strengthens our core capital base and expands our guarantee capacity as we continue to act as a catalyst to attract domestic credit from pension funds, insurance firms and other long-term institutional investors into credit-worthy infrastructure projects,” Azubike said. 

He said the equity investment from AIICO aligns with the company’s sponsor’s strategic objective to broaden InfraCredit’s investor base through private sector participation.