FG seeks $500m loan as Tinubu’s tenure nears end

The Federal Government is seeking a fresh $500m World Bank loan for an infrastructure financing platform, with the proposed approval date falling just four days before President Bola Tinubu’s tenure is scheduled to end on May 29, 2027.

The proposed facility, which has not yet been approved, is scheduled for consideration on May 25, 2027, raising questions about the timing of the borrowing and its implications for the incoming administration.

According to the World Bank’s Initial Project Information Document noted that the loan is 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, lists the Federal Ministry of Finance as the borrower and the Nigeria Sovereign Investment Authority as the implementing agency.

The World Bank has scheduled the project’s technical design review for January 21, 2027, while its estimated approval date is May 25, 2027. The timetable remains subject to change, and approval would not automatically translate into immediate disbursement or implementation.

The proposed financing comes as political activities intensify ahead of the 2027 general elections.

The World Bank estimates Nigeria’s annual infrastructure financing gap at approximately $100bn, describing it as a major constraint on economic growth, fiscal sustainability, competitiveness and job creation.

“Nigeria’s infrastructure financing gap, estimated at approx. $100bn annually, remains a binding constraint on growth, fiscal sustainability, competitiveness, and job creation,” the document stated.

The bank said the challenge was not limited to insufficient capital but also involved difficulties in preparing infrastructure projects that could attract private investment.

It said closing the gap would require improved project preparation, risk-mitigation instruments and reforms to strengthen the operating environment.

The proposed $500m World Bank facility comprises $400m from the International Bank for Reconstruction and Development and $100m from the International Development Association.

The broader $3.85bn financing structure is expected to draw contributions from government, private investors, commercial lenders and guarantee providers.

Under the arrangement, the NSIA is projected to contribute $200m in equity as a founding shareholder, while private sector investors are expected to provide another $200m.

Commercial debt financing is estimated at $600m, alongside other funding and guarantee arrangements.

The document also outlines $100m in IDA payment guarantees and $2.25bn in guarantees from other international financial institutions, bringing the guarantee-related arrangements to $2.35bn.

The proposed platform will operate through four independently governed subsidiaries designed to address different barriers to infrastructure investment.

The Project Preparation Facility will fund feasibility studies, transaction structuring, risk assessments and procurement support to help develop projects capable of attracting investors.

The Viability Gap Fund will support economically important projects that cannot generate sufficient commercial returns while maintaining affordable tariffs or sustainable government payments.

The bank said the proposed endowment model would preserve the fund’s capital base and finance viability-gap support mainly through investment returns.

The Risk Capital Facility will provide equity and patient capital to projects considered commercially viable but unable to attract investors willing to assume higher risks.

The Credit Guarantee Vehicle will provide guarantees against specified credit defaults, public-sector payment failures and political risks affecting eligible foreign investments.

The World Bank said the facilities were expected to encourage participation by commercial banks, pension funds, insurance companies and other institutional investors.

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The project will also support reforms aimed at strengthening public institutions responsible for identifying, preparing, procuring and supervising public-private partnership projects.

Its implementation will cover institutional development, project preparation, financing mobilisation and improvements to the regulatory environment.

The International Finance Corporation is expected to participate as a prospective co-investor, while the Multilateral Investment Guarantee Agency may provide political risk insurance.

The World Bank has classified the proposed project’s environmental and social risks as high, citing potential impacts from infrastructure developments in energy, transport and water.

The risks identified include land acquisition, community displacement, environmental damage, occupational hazards and other social consequences.

The bank described INFRAGROW as “an institution-building and private capital mobilisation operation intended to expand sustainable infrastructure in Nigeria.”