The Nigerian Sovereign Investment Authority (NSIA), operators of the Sovereign Wealth Fund (SWF) is set to deploy more investments into infrastructure, expressing a move towards unveiling appropriate funding plans and project structures being redeveloped for the Lagos-Ibadan Expressway, Second Niger Bridge, Abuja-Kano Expressway and East-West road projects.
The NSIA, which is playing a deeper investment role in infrastructure projects under its Infrastructure Fund window, said while the Lagos-Ibadan Expressway, Second Niger Bridge, Abuja-Kano Expressway and East-West road projects fall within investible transactions for the Authority, its involvement was principally to ensure an increased inland road stock while creating cross-country arterial roads to catalyse the flow of economic activities.
NSIA Managing Director/Chief Executive Officer, Mr. Uche Orji, who briefed journalists in Abuja, weekend where he formally unveiled the audited financial results for the 2017 financial year, said: “Appropriate funding plans and project structures are being redeveloped for these projects and will be unveiled in 2018.”
Although the Authority had in February 2017 announced its plan to invest $760 million in the Second Niger Bridge last year, for instance, Orji’s disclosure that “appropriate funding plans and project structures are being redeveloped,” is expected to provide the compass into the level of NSIA investment in that project and the others.
Providing some insight into what kind of infrastructure the NSIA would be investing in, Orji listed some of them as toll roads, power, and healthcare, among others.
According to him, the healthcare sector was accorded a heightened degree of attention in 2017 as a key infrastructure focus area, adding that final contracts were drawn up with the approved partners of federal tertiary medical facilities under a medical public private partnership (PPP) programme.
“Within Q1 2018, NSIA closed the development of a privately managed advanced cancer radiotherapy treatment centre to be located within Lagos University Teaching Hospital (LUTH), and privately-operated medical diagnostic centres equipped with modern facilities to be located at the Aminu Kano Teaching Hospital; and the Federal Medical Centre Umuahia (FMCU) respectively.
“It is expected that by year-end, the Lagos centre would have reached an advanced stage of completion,” Orji said.
He also disclosed the creation of financial institutions that enable investments in infrastructure, citing that Infrastructure Credit Guarantee Limited (InfraCredit), a company established to provide credit enhancement against local currency bonds for eligible domestic infrastructure transactions.
“Within the period under review, InfraCredit completed its first transaction, a 10-year bond deal for Viathan Power, which significantly reduced Viathan’s interest expense by enabling it to access N10 billion of long-term funding via a direct bond raise with institutional investors,” he said.
Unveiling NSIA’s 2017 financial results, Orji said total comprehensive income (including the impact of foreign exchange gains) of N27.93 billion in the previous year stood at N149.83 billion, just as total comprehensive income (excluding the impact of foreign exchange gains) of N26.28 billion (previous year) was N46.24 billion.
Total assets, he noted, recorded a growth of 27 per cent to stand at N533.88 billion compared to the N420.93 billion in the corresponding period of 2016.
He attributed 68 per cent of asset growth to the $250 million National Economic Council (NEC) contribution during its Governing Council meeting, but which was received in the third quarter of 2017.
Return on capital employed (ROCE) on the core funds also showed 5.17 per cent, 6.05 per cent and 3.50 per cent for the Stabilisation Fund, Future Generation Fund and Nigeria Infrastructure Fund respectively.
On the outlook for 2018, Orji stated that global market volatility in 2018 was expected to be driven by rising interest rates in the United States, adding that on the local scene, anticipation of a further decline in interest rate in the Nigerian market would potentially discourage investors.
He, however, noted that in spite of this, the Authority would continue to maintain its diversified asset strategy to drive returns and mitigate market volatility, adding that it anticipates increased investments in infrastructure as more projects come up to financial close.