Why we introduced N100bn IBTC infrastructure fund

Dr. Demola Sogunle, Chief Executive Officer of Stanbic IBTC Holding Plc, has said that the bank established a N100 billion fund to help close the infrastructure gap in Nigeria.

Sogunle said this at a Hybrid event organised by the Rotary Club of Ikeja, District 9110 with the topic, “Solving Infrastructure Deficit in Nigeria”, on Monday in Lagos. According to him, infrastructure deficit truly exists in Nigeria and begs for immediate solution.

“So, in order for us not to complain, we saw the situation and decided to create value by introducing IBTC Infrastructure fund of N100 billion, and the important thing is that we have started disbursing already.

“The plan is simple: we would provide project owners with long-term capital to fund their projects whilst investors enjoy competitive returns as well as achieve set investment goals.

“The Fund would be released in tranches, starting with the first N20 billion tranche which is now open for subscription, providing an avenue for investors to gain exposure to critical infrastructure projects.

“The tranche has a 12-year maximum duration,’’ he said.
Sogunle also said Nigeria, ranking 7th in terms of population, needed 1.5 trillion dollars over the period of 10 years to close infrastructure gap, which is a lot of money.

He said that the budget that was put to infrastructure projects could not take Nigeria anywhere.
“The 4.89trillion capital expenditure, dedicated to infrastructure projects accounts for 30 per cent of the proposed 2022 budget.

“The infrastructure stock, is about 30 per cent of our GDP, our GDP is about 400 billion dollars plus; Nigeria infrastructure stock of 30 per cent of GDP remains far below the 70 per cent international benchmark and it’s not going to take us anywhere.

“This is just for us to know the enormity of the issue,’’ Sogunle said.
He noted that African countries like Egypt, Tunisia, South Africa, etc, were far ahead of Nigeria in terms of infrastructure development.

He said that in the 2019 Global Competitiveness Index Report, Nigeria scored 48.33 points out of 100 and ranked 130th of 141 countries surveyed for the overall quality infrastructure. Sogunle mentioned some challenges affecting infrastructure development in the country.

These include, huge capital outlay versus Budget Constrains and Huge cost of financing, political and regulatory risk which is high, poor maintenance culture, low risk appetite by financial institutions and suboptimal record of past projects.
The bank CEO also said that the impact of $10bn infrastructure investment required on GDP growth rate was assumed at N3.6trillion (US$10billion) per year from 2019 to 2030 according to Nigerian Integrated Infrastructure Master plan (NIIMP).

He said that the real GDP was expected to decline by 0.19 per cent in 2020 but rebound to 3.85 per cent by 2021 and 10.68 per cent by 2030, reflecting the impact of the implementation of the plan.

Stanbic IBTC’s N15bn infrastructure fund offer opens

Stanbic IBTC Asset Management Limited, a subsidiary of Stanbic IBTC Holdings Plc, has announced that the N15 billion Series II Offer under its Stanbic IBTC Infrastructure Fund   N100 billion Shelf Programme, is now open and scheduled to close on Friday, 10 June 2022.

The Fund is designed to bridge the gap between the long-term funding needs of promoters of infrastructure projects and the needs of investors with long-term capital. It is structured as a close-ended collective investment scheme, and seeks to provide competitive returns above the benchmark Federal Government of Nigeria 10-year bond yield.

Speaking about the development, Dolu Olugbenjo, Chief Investment Officer, Stanbic IBTC Infrastructure Fund, said, “Subsequent to the deployment of Series I proceeds, we are pleased to present the Offer to investors to support a robust pipeline of investment opportunities currently under our review. These include infrastructure and infrastructure-related project opportunities in healthcare, transport, logistics, renewable power and energy, amongst othe