Globally, infrastructure contributes to economic development by increasing productivity and providing amenities, which enhance quality of life and business activities. The debt capital markets (DCM) provide a key avenue through which infrastructural growth can be sustained to promote economic development, and Nigeria is beginning to take a cue from model markets like the United States, United Kingdom and Malaysia, which have used the strength of their DCM to power growth, fund and set up viable infrastructure projects to support development for the good of their citizenry. The Chapel Hill Denham Nigeria Infrastructure Debt Fund is the latest in these laudable initiatives that are paving the way for the development of Nigeria’s infrastructure sectors via the Nigerian DCM. Thus, having successfully obtained the Securities and Exchange Commission’s approval, Chapel Hill Denham Management Limited registered and established the Nigeria Infrastructure Debt Fund (NDIF) ₦200,000,000,000.00 Issuance Programme, and subsequently issued the first series under this Programme – Series I 49,450,000 Units of ₦101.20 each. The NIDF (or the Fund) – the Chapel Hill Denham Nigeria Infrastructure Debt Fund Series I 49,450,000 Units of ₦101.20 each, under the ₦200,000,000,000.00 Issuance Programme – following a very swift and efficient application process, was granted approval on July 14, 2017, by the FMDQ Board Listings, Markets and Technology Committee, to be listed on the platform of FMDQ OTC Securities Exchange (FMDQ or the OTC Exchange).
The Fund, which is the first-ever listed infrastructure debt fund in Nigeria (and Sub-Saharan Africa), is a close-ended fund and has its investment focus on the traditional infrastructure sectors, primarily transport, power, renewable energy, utilities, energy infrastructure (e.g. storage terminals), logistics and other public-private-partnership type investments, thereby supporting infrastructural development in Nigeria. The Fund aims to enable investors access infrastructure as an asset class, while providing the benefit of predictable returns available from long-dated infrastructure debt investments.
To commemorate this remarkable and historic feat, a prestigious Listing Ceremony was held at the offices of the OTC Exchange on Monday, July 17, 2017. In recognition of the profound significance of this achievement, FMDQ pulled out all the stops during this Ceremony, to not only express this recognition and commend Chapel Hill Denham’s efforts in leveraging the Nigerian DCM in an attempt to close the nation’s infrastructure gap, but also to increase awareness, towards garnering additional nationwide support for this creditable initiative. From the dedication of a live one-hour Channels Television Business Morning Show focused on the NIDF and the listing of the Fund, to the live airing of the actual hour-long Listing Ceremony, it is clear that FMDQ, in partnership with key stakeholders – the DCM community, financial services regulators and media – are total advocates of using the Nigerian DCM to finance the development of the nation.
Present at the well-organised Ceremony were the CEO, Chapel Hill Denham Group & Chief Investment Officer, the Nigeria Infrastructure Debt Fund, Mr. Bolaji Balogun; the Managing Director, Chapel Hill Denham Management Ltd. (the Fund Manager), Mrs. Ononuju Irukwu; the Director-General, Securities and Exchange Commission (SEC), ably represented by Ms. Ojone Umoru, Assistant Director (Legal), Investment Management Department, SEC; the Managing Director, AIICO Pension & Chairman, Pension Fund Operators Association of Nigeria, Mr. Eguarekhide Longe; the Chairman, Investment Committee, Nigeria Infrastructure Debt Fund, Mr. Phillip Southwell; and other senior representatives from Chapel Hill Advisory Partners Ltd. (FMDQ’s Registration Member [Listings] & Sponsor of the Fund on the OTC Exchange), the Nigeria Sovereign Investment Authority, the African Development Bank, Pension Fund Administrators and other buy-side investors, amongst others.
The Listing Ceremony, in line with FMDQ’s tradition, was marked with memorable highlights which included, amongst other activties, a short video on FMDQ as innovative OTC Exchange; the signing of the FMDQ Funds Listing Register and presentation of the FMDQ Funds Listing Certificate; the unveiling of the FMDQ Listing Scrolls; and the special autograph impressions by the guests of honour.
Welcoming the guests to the Ceremony, Ms. Tumi Sekoni, Vice President, Marketing & Business Development at FMDQ, commended the Nigeria Infrastructure Debt Fund and Fund Manager for achieving this milestone, noting that mobilisation of domestic funding for infrastructure was immense progress in the right direction for the Nigerian economy, and choosing to list the Fund on FMDQ was in consonance with this progress. According to Ms. Sekoni, the FMDQ Listings/Quotations service has been tailored to provide issuers as well as Fund Managers, an avenue to improve the credibility of debt securities issuances, thereby gaining from the substantial and indispensable benefits, including but not limited to, transparency, capital access, price formation and visibility, which such listings/quotations on FMDQ guarantee.
Whilst delivering the keynote address, Mr. Bolaji Balogun said “Infrastructure funding has been a major investment theme in our firm over the last decade. We are very proud of this pioneering role and NIDF is a natural fit with our commitment to developing Nigeria and Africa’s productive infrastructure. The progressive regulatory environment in Nigeria, which enabled NIDF to be conceptualised, reaffirms the forward-thinking approach of PenCom, SEC and FMDQ. Infrastructure debt provides a uniquely attractive combination of long term, stable, predictable income and a yield higher than that available from government bonds.”
In the same vein, Mr. Philip Southwell, Chairman of NIDF’s Investment Committee, said “NIDF aims to provide investors regular and stable income by making debt investments in Nigerian infrastructure projects. The market opportunity is huge in Nigeria not only because of the size of the pension fund assets available for investment in NIDF, but also by the number of high quality, investable projects.”
According to Mr. Anshul Rai, the Chief Executive Officer of NIDF, “Project owners looking for long-dated infrastructure debt now have a reliable partner in the NIDF. Also, by funding in Naira, the NIDF removes currency risk, for both investors and borrowers alike, and that helps make Nigerian infrastructure a much safer place to invest.”
In his closing address, Mr. Bola Onadele. Koko, Managing Director/CEO of FMDQ, called on governments in Nigeria to unlock the potentials of the Nigerian economy by facilitating private sector funding for infrastructure. He encouraged government reforms and regulation to position key sectors to be commercially viable to galvanise huge capital to infrastructure. Mr. Onadele stated also, that the OTC Exchange was working hard, in collaboration with other key stakeholders, to facilitate the development of a sustainable finance strategy for the country.
The listing of the NIDF on FMDQ serves to further validate the recent recognition of FMDQ as the most innovative securities exchange in the Nigerian financial markets by BusinessDay at its 2017 Top 25 Most Innovative Companies & Institutions in Nigeria Awards. FMDQ will remain steadfast in its commitment towards the development of the Nigerian DCM, and the Nigerian economy at large, and provide the requisite platform to power the growth in the Nigerian DCM, offering the highest credible markets for capital transfers.