The Federal Government is seeking a fresh $500m loan from the World Bank to establish an infrastructure financing platform aimed at attracting private investment into critical sectors of the Nigerian economy.
The proposed facility, which is expected to receive consideration for approval on May 25, 2027, comes just four days before the scheduled inauguration of Nigeria’s next president on May 29, raising questions about the timing of the borrowing and the financial commitments that could be inherited by the incoming administration.
According to the World Bank’s Initial Project Information Document, obtained by The PUNCH on Sunday, the proposed loan forms part of a broader $3.85bn infrastructure financing initiative known as the Nigeria Infrastructure Financing and De-Risking Platform for Growth and Jobs, or INFRAGROW.
The document, prepared and updated on November 4, 2026, identifies the Federal Ministry of Finance as the borrower, while the Nigeria Sovereign Investment Authority is designated as the implementing agency.
The World Bank has scheduled the project’s technical design review for January 21, 2027, with May 25, 2027, set as its estimated approval date.
The proposed timeline places the facility’s consideration for approval in the final days of President Bola Tinubu’s current tenure.
However, the proposed financing has not received approval, and the World Bank’s schedule remains subject to adjustments. Approval would also not automatically translate into immediate disbursement or implementation.
The World Bank document estimates Nigeria’s annual infrastructure financing deficit at approximately $100bn, describing the shortfall as a major constraint on economic growth, fiscal sustainability, competitiveness and job creation.
It stated, “Nigeria’s infrastructure financing gap, estimated at approx. $100bn annually, remains a binding constraint on growth, fiscal sustainability, competitiveness, and job creation.”
The bank noted that addressing the challenge would require more than increased funding, stressing the need for proper project preparation, risk-sharing mechanisms and reforms capable of creating a favourable investment environment.
It added that closing the financing gap would require “an integrated approach” combining rigorous project preparation, appropriately designed de-risking instruments and targeted sectoral reforms.
Under the proposed arrangement, the World Bank’s $500m contribution would comprise $400m from the International Bank for Reconstruction and Development and $100m from the International Development Association.
The wider $3.85bn financing structure is expected to attract funding from government, private investors, commercial lenders and international financial institutions through equity investments, debt financing and guarantees.
The Nigeria Sovereign Investment Authority is expected to contribute $200m in equity as a founding shareholder, while private sector investors are projected to provide another $200m.
Commercial debt financing is estimated at $600m, while the arrangement also includes $100m in payment guarantees from the IDA and $2.25bn in guarantees from other international financial institutions.
These guarantee arrangements, valued at $2.35bn, are intended to reduce investment risks and encourage greater participation by private capital providers.
The proposed platform will operate through four independently governed subsidiaries, each designed to address specific challenges affecting infrastructure financing in Nigeria.
The first, the Project Preparation Facility, will provide funding for feasibility studies, transaction structuring, risk assessments and procurement support to transform infrastructure proposals into commercially viable projects capable of attracting investors.
The second, the Viability Gap Fund, will provide financial support for economically important projects that may not generate sufficient commercial returns while maintaining affordable tariffs and sustainable government payments.
Explaining the proposed funding model, the World Bank stated, “Under the proposed endowment model, the VGF would preserve its capital base and finance viability-gap support primarily from investment returns.”
The third subsidiary, the Risk Capital Facility, will provide equity and other forms of long-term investment capital to infrastructure projects considered commercially viable but unable to attract investors because of their relatively high risk profiles.
The fourth, the Credit Guarantee Vehicle, will offer guarantees against specified credit defaults, public-sector payment failures and political risks affecting eligible foreign investments.
The World Bank said the interventions were designed to improve investor confidence and attract funding from commercial banks, pension funds, insurance companies and other institutional investors.
Beyond financing, the initiative will support reforms aimed at strengthening public institutions responsible for identifying, preparing, procuring and supervising public-private partnership projects.
Its implementation will be structured around four major components covering institutional development, project preparation, financing mobilisation and improvements to the regulatory environment.
The institutional development component will support staffing, professional advisory services, statutory fees and operational infrastructure, with disbursements linked to measurable institutional milestones.
The second component will focus on project preparation and financial viability, while the third will activate the risk capital and credit guarantee facilities.
The fourth component will strengthen government capacity to manage infrastructure partnerships and assess the fiscal risks associated with such arrangements.
Describing the initiative, the World Bank said, “The proposed Nigeria INFRAGROW project is an institution-building and private capital mobilisation operation intended to expand sustainable infrastructure in Nigeria.”
The International Finance Corporation is also expected to participate as a prospective co-investor, while the Multilateral Investment Guarantee Agency may provide political risk insurance to eligible investments.
However, the World Bank has classified the proposed project’s environmental and social risks as high, citing the potential consequences of infrastructure developments that may be financed through the platform.
The identified sectors, particularly energy, transport and water, could involve land acquisition, displacement of communities, environmental degradation, occupational hazards and other social impacts.