FG seeks fresh $500m World Bank loan

The Federal Government is seeking a fresh $500m loan from the World Bank to establish an infrastructure financing platform, with the proposed approval scheduled for 25 May, 2027, just four days before the inauguration of Nigeria’s next president.

The proposed borrowing comes as political activities intensify ahead of the 2027 general elections, raising questions about the timing of fresh financial commitments and their implications for the incoming administration.

According to the World Bank’s Initial Project Information Document, obtained by The PUNCH on Sunday, the facility forms part of a broader $3.85bn infrastructure financing initiative designed to attract private investment into critical sectors of the Nigerian economy.

The document, prepared and updated on 4 November, 2026, identifies the initiative as the Nigeria Infrastructure Financing and De-Risking Platform for Growth and Jobs, otherwise known as INFRAGROW.

The Federal Ministry of Finance is listed as the borrower, while the Nigeria Sovereign Investment Authority will serve as the implementing agency.

The bank has scheduled the project’s technical design review for 21 January, 2027, while its estimated approval date is 25 May, 2027.

Nigeria’s presidential inauguration is constitutionally scheduled for 29 May, 2027, following the expiration of the current four-year presidential term.

The timing means the proposed facility could receive World Bank approval in the final days of President Bola Tinubu’s current term, although approval would not necessarily mean immediate disbursement or implementation.

The proposed financing has not yet been approved, and the World Bank’s published timetable remains subject to change.

The document puts the country’s annual infrastructure financing shortfall at approximately $100bn, identifying inadequate investment and weak project preparation as major obstacles to economic growth.

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

The bank explained that the challenge extended beyond insufficient funding to the difficulty of converting available capital into commercially viable infrastructure investments.

It added, “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 proposed $500m World Bank financing comprises $400m from the International Bank for Reconstruction and Development and $100m from the International Development Association.

The wider $3.85bn financing structure also includes contributions from government, private investors, commercial lenders and guarantees intended to encourage additional investment.

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

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

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

The financing arrangement is expected to operate through four independently governed subsidiaries, each designed to address a particular obstacle to infrastructure investment.

The first, the Project Preparation Facility, will finance feasibility studies, transaction structuring, risk assessments and procurement support to help transform infrastructure proposals into projects capable of attracting investment.

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

The document explained, “Under the proposed endowment model, the VGF would preserve its capital base and finance viability-gap support primarily from investment returns.”

The third subsidiary, the Risk Capital Facility, will provide equity and other forms of patient capital to infrastructure projects that are commercially viable but struggle to attract investors willing to bear higher risks.

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

According to the bank, these interventions are intended to encourage participation by commercial banks, pension funds, insurance companies and other institutional investors.

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

Its implementation will be divided into four components covering institutional development, project preparation, financing mobilisation and improvements to the regulatory environment.

The first component will finance staffing, professional advisory services, statutory fees and operational infrastructure, with disbursements linked to measurable institutional milestones.

The second will support 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 their associated fiscal risks.

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 project will also involve the International Finance Corporation as a prospective co-investor, alongside the Multilateral Investment Guarantee Agency, which is expected to provide political risk insurance.

The bank has classified the proposed project’s environmental and social risks as high, particularly because the financing platform could support major infrastructure developments in energy, transport and water.

It warned that such investments could involve land acquisition, displacement of communities, environmental damage, occupational hazards and other social consequences.