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The Nigeria Infrastructure Fund to be launched in June 2015

Africa Global Funds
Dec. 18, 2014, midnight
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GEMfonds, a UK-based investment management company, has revealed it plans to launch a $500m Nigeria-focused infrastructure fund in June 2015, alongside Sigrun, a Madrid-based investment banking firm, and The Infrastructure Bank (TIB), a partly Nigeria’s government-owned dedicated infrastructure bank.

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GEMfonds, a UK-based investment management company, has revealed it plans to launch a $500m Nigeria-focused infrastructure fund in June 2015, alongside Sigrun, a Madrid-based investment banking firm, and The Infrastructure Bank (TIB), a partly Nigeria’s government-owned dedicated infrastructure bank.

According to Daniel Broby, CEO of GEMfonds, the Nigeria Infrastructure Fund 1 is targeting $150m at the first close.

“The first close will be sourced from Nigeria, hopefully by March, but in any event before the second round which brings in the development finance institutions,” he told Africa Global Funds.

The fund will be investing in and lending to greenfield and brownfield PPP (public private partnership) projects primarily within the Nigerian infrastructure space.

“Strategy is largely to focus on PPP initiatives with bankable cash flows,” he said.

The fund would primarily focus on sectors such as transportation, municipal common services and utilities, power and renewable energy, oil and gas logistics services as well as real estate and telecommunications.

“Both TIB and Sigrun already have deals identified. These will be evaluated based on the fund criteria before we disclose if we are going to participate,” said Broby.

“With the expertise and execution capabilities of NIF1, we believe that significant IRR’s can be achieved. We will create a feeder fund for development finance institutions and international investors to participate alongside Nigerian investors in the exciting PPP and government championed infrastructure initiatives,” he added.

The fund will be managed by the Infrastructure Bank Asset Management Company, a subsidiary of TIB.

However, according to Broby the terms of the joint venture are largely confidential.

He could confirm that Brice Beumo will be co-opted from GEMfonds to run the Lagos-based team.

Beumo has an extensive experience, having previously worked as a senior associate at Renaissance Capital, where he was focusing on developing Specialty Finance business initiatives to ensure continued sustainability and growth for the Bank in Francophone Africa.

TIB said that the opportunity to establish the infrastructure fund is underpinned by the ability of the partners to identify, structure and invest in long-term infrastructure projects that “have the potential to generate stable, predictable, and recurring cash flow as well as ensure high returns with strong economic performance”.

“In addition to the preservation of and return on investors’ funds, the NIF1 has the mandate to focus on projects with high potential for the promotion of inclusive growth and socio-economic development, with the resultant effect of reducing the cost of doing business and enhancing the quality of lives of the Nigerian masses,” the Bank added.

When asked about currency depreciation and whether it poses a risk, Broby said: “Naira decline unfavorable for other funds, but the country has reserves and needs infrastructure. So we are only affected by sentiment.”

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