BY TAIBAT UMMI YAKUBU

Nigeria's Federal Government is seeking a $500 million financing facility from the World Bank as it prepares a new $3.85 billion investment platform to attract funding for major infrastructure projects across the country.

The proposed arrangement, known as the Nigeria Infrastructure Financing and De-Risking Platform for Growth and Jobs (INFRAGROW), is designed to bring government agencies, international financial institutions and private investors together to finance infrastructure development.

Details contained in the World Bank's Initial Project Information Document, dated November 4, 2026, show that the Federal Ministry of Finance will serve as the borrower, while the Nigeria Sovereign Investment Authority (NSIA) will oversee implementation.

The World Bank's proposed contribution consists of $400 million from the International Bank for Reconstruction and Development (IBRD) and $100 million from the International Development Association (IDA).

The project is scheduled for a technical design review on January 21, 2027, with May 25, 2027, proposed as its approval date.

The proposed financing comes as Nigeria faces an estimated $100 billion annual infrastructure funding shortfall, a situation the World Bank says continues to restrict economic expansion, undermine competitiveness and limit employment opportunities.

However, the bank's assessment suggests that Nigeria's problem is not simply a shortage of money. It also identified the absence of sufficiently prepared and commercially attractive infrastructure projects as a major obstacle to attracting investors.

Under INFRAGROW, the government hopes to address this challenge by developing viable projects, reducing investment risks and creating financial arrangements that make infrastructure investments more attractive to domestic and foreign financiers.

How the government plans to raise $3.85bn

The proposed $3.85 billion funding structure will depend on several sources, with international guarantees accounting for the largest share.

The World Bank is expected to provide $500 million, while the Federal Government and private investors will contribute $200 million each in equity and related funding commitments.

Commercial lenders are expected to provide another $600 million, while $2.35 billion will be raised through financial guarantees.

The guarantee package will include $100 million in IDA payment guarantees and $2.25 billion from other international financial institutions.

The NSIA is expected to commit an indicative $200 million as the platform's founding shareholder, providing equity to its holding company.

The International Finance Corporation (IFC), the private-sector investment arm of the World Bank Group, is also being considered as a co-anchor investor to provide additional risk-bearing capital and encourage other investors to participate.

Four specialised facilities to drive investment

Rather than operate as a conventional government infrastructure fund, INFRAGROW will be structured around four independently governed subsidiaries, each responsible for addressing a specific financing challenge.

The Project Preparation Facility (PPF) will focus on turning infrastructure proposals into investment-ready projects. It will fund feasibility studies, financial and transaction structuring, risk allocation and procurement support.

The Viability Gap Fund (VGF) will address projects that have clear economic benefits but cannot generate sufficient revenue to attract commercial financing. Such projects may require financial support where affordable user charges or sustainable government payments are insufficient to cover their costs.

The proposed fund will operate under an endowment arrangement designed to protect its capital, with investment returns expected to finance much of its support.

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Another arm, the Risk Capital Facility (RCF), will provide equity and quasi-equity financing, including mezzanine investments, to commercially viable projects that lack sufficient risk-bearing capital.

The fourth subsidiary, the Credit Guarantee Vehicle (CGV), will help infrastructure developers secure financing by providing guarantees against selected investment and payment risks.

Its operations will cover three major areas: commercial lending and debt-service defaults, payment obligations involving public institutions, and political risks affecting eligible foreign investments.

Through these guarantees, the World Bank expects the platform to encourage longer-term lending, reduce financing costs and attract funds from Nigerian banks, pension administrators, insurance companies and other institutional investors.

Government agencies to receive stronger oversight framework

The proposed initiative will also target weaknesses in the way public infrastructure projects are developed and managed.

Public institutions are expected to receive support in identifying potential projects, conducting assessments, organising procurement processes, supervising construction and monitoring implementation.

The programme will equally introduce measures to improve how government evaluates and manages financial commitments arising from public-private partnership arrangements, including contingent liabilities that could eventually place additional pressure on public finances.

Its four major areas of intervention will cover the establishment of INFRAGROW's institutional framework, development of a pipeline of bankable infrastructure projects, mobilisation of investment funds and reforms to improve the environment for infrastructure financing.

The World Bank said the initiative was consistent with its Nigeria Country Partnership Framework for 2026–2032, particularly its strategy of mobilising private capital for infrastructure development and supporting employment through private-sector-led growth.

World Bank flags environmental and social risks

Despite the potential investment opportunities, the World Bank has classified INFRAGROW's environmental and social risks as high, warning that projects in the energy, transport and water sectors could have significant consequences for affected communities and the environment.

The risks identified include displacement of residents, land acquisition disputes, construction hazards, pressure on biodiversity, labour-related concerns and threats to community health and safety.

The bank also pointed to Nigeria's complicated land ownership arrangements, weaknesses in environmental oversight at the state and local levels, and increasing exposure to flooding, extreme temperatures, drought and rising sea levels.

Under the proposed arrangement, project developers and participating financial institutions will be primarily responsible for managing environmental and social risks, while INFRAGROW's holding company will provide oversight and the World Bank will maintain supervisory responsibilities.

The institution also identified opportunities to strengthen environmental protection through stricter project assessments, eligibility conditions for financial guarantees and reforms to Nigeria's infrastructure investment system.

If approved, the $3.85 billion platform would provide a new financing mechanism for infrastructure development, with the government seeking to use international guarantees and private-sector participation to attract capital into projects that might otherwise struggle to secure funding.

The proposed $500 million World Bank facility, however, remains subject to the bank's approval process, meaning the financing package should not be mistaken for an already approved or disbursed loan.