The Nigerian Federal Government has obtained a $747 million loan to finance the construction of Phase 1, Section 1 of the Lagos-Calabar Coastal Highway. This major infrastructure project is designed to enhance connectivity and stimulate economic growth in the southern region of Nigeria.
As per a statement released by the Ministry of Finance on Tuesday, Deutsche Bank, one of the world's leading financial institutions, arranged the loan facility.
Phase 1, Section 1 of the project encompasses the area extending from Victoria Island to Eleko Village in Lagos State. This segment plays a crucial role in an ambitious highway initiative intended to connect coastal states from Lagos all the way to Calabar.
According to Mr. Mohammed Manga, Director of Information and Public Relations, this represents the first syndicated road infrastructure loan of its magnitude in Nigeria and serves as "a strong signal of global investor confidence in the country's reform path and infrastructure initiatives."
The ministry stated that Deutsche Bank served as the Global Coordinator, Initial Mandated Lead Arranger, and Bookrunner while also participating in the syndicate with other regional and international lenders.
The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) offered insurance covering partial political and commercial risks.
The syndicate is backed by development finance institutions, export credit agencies, and international commercial banks. Notably, First Abu Dhabi Bank plays a key role as both the Agent across all facilities and the Intercreditor Agent. Their participation highlights their strong and increasing support for Nigeria.
Additional lenders include the African Export-Import Bank ("Afrexim"), the Abu Dhabi Exports Office ("ADEX"), the ECOWAS Bank for Investment and Development ("EBID"), Nexent Bank N.V. (previously Credit Europe Bank N.V.), and Zenith Bank, which operates through its offices in the UK, Paris, and Nigeria.
The project is organized as an EPC+F (Engineering, Procurement, Construction + Financing) contract granted to Hitech Construction Company, a prominent infrastructure firm in Nigeria.
This framework aims to establish a strategic partnership between the Government and the private sector, effectively coordinating technical implementation with financial solutions.
It facilitates expedited project completion while enhancing and leveraging the interest of the private sector in investing in the country's key infrastructure.
The ministry reported that Phase 1, Section 1 construction is already over 70% finished.
Additionally, the highway, built with Continuously Reinforced Concrete Pavement (CRCP), demonstrated a dedication to long-term durability and efficiency.
Designed to last at least 50 years with minimal upkeep, it provides exceptional durability and cost-effectiveness.
The project's design and execution have been influenced by thorough technical, legal, environmental, and social evaluations to ensure they meet the highest international standards.
Discussing the loan, Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy, stated that "This agreement signifies the effectiveness of our macroeconomic reforms and indicates a resurgence in international investment to aid Nigeria's development."
Our primary goal is to finance infrastructure in sustainable, transparent, and catalytic ways—this transaction exemplifies that vision put into practice.
The completion of this pivotal financing deal further demonstrates Mr. President's dedication to enhancing private sector involvement in infrastructure funding and development.
It indicates that the country is prepared to fully transition to designing, developing, financing, operating, and managing essential public infrastructure via Public-Private Partnerships.
This indicates to investors and private sector participants the sophistication and maturity of the Nigerian market, as well as the government's commitment to upholding contract integrity and developing innovative structures for funding essential national infrastructure that will drive sustained and inclusive growth.
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