The Federal Government is seeking a fresh $500m loan from the World Bank to establish an infrastructure financing platform aimed at mobilising private investment, with the proposed approval date falling four days before the inauguration of Nigeria’s next president on May 29, 2027.
The proposed borrowing, which comes amid growing political activities ahead of the 2027 general elections, could see the administration of President Bola Tinubu secure approval for another major external financing commitment shortly before leaving office.
According to the World Bank’s Initial Project Information Document obtained by The PUNCH, the proposed facility is part of a broader $3.85bn 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, puts the estimated approval date for the project at May 25, 2027, while its technical design review is scheduled for January 21, 2027.
The Federal Ministry of Finance is listed as the borrower, with the Nigeria Sovereign Investment Authority designated as the implementing agency.
With the presidential inauguration constitutionally scheduled for May 29, 2027, the proposed approval would come in the final days of Tinubu’s current tenure.
However, the proposed loan is yet to receive approval, and the World Bank's projected timeline remains subject to adjustments. Approval would also not automatically translate into immediate disbursement or commencement of implementation.
The World Bank estimates Nigeria’s annual infrastructure financing deficit at about $100bn, describing the shortfall as a major constraint on economic growth, fiscal sustainability, competitiveness and employment generation.
It noted that the challenge was not limited to the availability of funds but also involved inadequate project preparation and difficulties in developing commercially viable infrastructure investments.
The document stated, “Nigeria’s infrastructure financing gap, estimated at approx. $100bn annually, remains a binding constraint on growth, fiscal sustainability, competitiveness, and job creation.”
It added that bridging the deficit would require a combination of proper project preparation, risk-sharing mechanisms and reforms capable of improving the investment climate.
“Closing the financing gap therefore requires an integrated approach that combines rigorous project preparation, appropriately calibrated de-risking instruments tailored to each project’s residual risk profile, and targeted sectoral reforms to strengthen the operating environment,” the bank stated.
The proposed $500m World Bank facility comprises $400m from the International Bank for Reconstruction and Development and $100m from the International Development Association.
The wider $3.85bn financing package is expected to draw contributions from government, private investors, commercial lenders and international financial institutions through equity investments, debt and guarantee arrangements.
Under the proposed structure, the NSIA will provide $200m in equity as a founding shareholder, while private investors are expected to contribute another $200m.
Commercial debt financing is projected at $600m, while the guarantee component includes $100m in IDA payment guarantees and $2.25bn in guarantees from other international financial institutions.
The financing framework will operate through four independently governed subsidiaries, each established to address specific challenges limiting investment in infrastructure projects.
These include a Project Preparation Facility, a Viability Gap Fund, a Risk Capital Facility and a Credit Guarantee Vehicle.
The Project Preparation Facility will support feasibility studies, transaction structuring, risk assessments and procurement processes to ensure that infrastructure proposals are sufficiently developed to attract investors.
The Viability Gap Fund, on the other hand, will provide financial assistance to economically important projects that may not generate enough commercial returns to attract private capital while keeping tariffs affordable or government payments sustainable.
According to the document, “Under the proposed endowment model, the VGF would preserve its capital base and finance viability-gap support primarily from investment returns.”
The Risk Capital Facility will provide equity and patient capital to commercially viable infrastructure projects that investors may consider too risky, while the Credit Guarantee Vehicle will offer protection against specified credit defaults, public-sector payment failures and political risks affecting eligible foreign investments.
The World Bank expects the interventions to encourage greater participation by commercial banks, pension funds, insurance companies and other institutional investors in infrastructure development.
Beyond financing, the initiative will also support reforms aimed at strengthening public institutions responsible for identifying, preparing, procuring and supervising public-private partnership projects.
Its implementation will be organised around four components covering institutional development, project preparation, mobilisation of financing and improvements to the regulatory environment.
The institutional development component will provide funding for personnel, professional advisory services, statutory fees and operational infrastructure, with disbursements tied 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 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 will provide political risk insurance.
Meanwhile, the World Bank has classified the proposed project's environmental and social risks as high, citing the potential consequences of infrastructure investments in sectors such as energy, transportation and water.
It warned that projects supported by the platform could result in land acquisition, displacement of communities, environmental degradation, occupational hazards and other social challenges.
The classification underscores the need for appropriate environmental and social safeguards as the proposed financing platform prepares to support large-scale infrastructure investments across the country.
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