Describes how major projects are secured and financed. Explains activities of the multilateral development banks in and other aid-funded projects.
Financing of Projects
Given foreign currency constraints, funding can be obtained locally from Nigerian banks. To a limited extent, insurance companies, building and property development companies, pension fund companies and other institutional investors can also provide financing. Private equity firms also exist and can support projects. U.S. government financing agencies are active in Nigeria. The U.S. Trade and Development Agency (USTDA) provides financing for feasibility studies, while the Export-Import Bank (Ex-Im Bank) supports the export of goods made in the United States. The U.S. International Development Finance Corporation (DFC), which replaced the Overseas Private Investment Corporation (OPIC), is America’s development bank which partners with the private sector to finance solutions to the most critical challenges facing the developing world today. The African Development Bank (AfDB) also grants finance to certain operations of companies exporting goods from Nigeria. The AfDB channels these loans through the CBN to the Nigerian Export‑Import Bank (NEXIM), Bank of Industry (BOI), and licensed export financing banks.
Multilateral Development Banks and Financing Government Sales: Price, payment terms, and financing can be a significant factor in winning a government contract. Many governments finance public works projects through borrowing from the Multilateral Development Banks (MDB). A helpful guide for working with the MDBs is the Guide to Doing Business with the Multilateral Development Banks. The U.S. Department of Commerce’s (USDOC) International Trade Administration (ITA) has a Foreign Commercial Service Officer stationed at each of the five different Multilateral Development Banks (MDBs) including the World Bank and African Development Bank.
Power Africa is a market-driven, U.S. Government-led public-private partnership aiming to double access to electricity in sub-Saharan Africa. It offers tools and resources to private sector entities to facilitate doing business in sub-Saharan Africa’s power sector. The Electrify Africa Act of 2015 institutionalized Power Africa. Learn more about the full Power Africa toolbox or other opportunities offered by Power Africa.
U.S. Export-Import Bank (EXIM)
EXIM is actively seeking bankable projects to support in Nigeria, and is currently meeting with private developers, banks and the government on a variety of sectors, particularly infrastructure related. EXIM offers direct loans, loan guarantees and credit insurance tied to U.S. exports.
The U.S. International Development Finance Corporation (DFC)
DFC was established in 2019 through the passage of the BUILD, or Better Utilization of Investments Leading to Development Act which strengthened and modernized American development finance. The BUILD Act combined the capabilities of the Overseas Private Investment Corporation (OPIC) and the Development Credit Authority which had previously been housed in the U.S. Agency for International Development (USAID). DFC invests across sectors including energy, healthcare, critical infrastructure, and technology. DFC also provides financing for small businesses and women entrepreneurs in order to create jobs in emerging markets. DFC investments adhere to high standards and respect the environment, human rights, and worker rights. DFC offers equity financing, political risk insurance, debt financing, and technical development.
U.S. Trade and Development Agency (USTDA)
The U.S. Trade and Development Agency (USTDA) connects the U.S. private sector to infrastructure projects in emerging market by funding feasibility studies, technical assistance and pilot projects that integrate the innovation and expertise of American companies. USTDA also connects overseas project sponsors with U.S. partners through reverse trade missions, industry conferences and expert workshops. In 2019, every $1 USTDA invested in its programs generated $111 in U.S. exports. USTDA has facilitated $73 billion in U.S. exports since its founding in 1992, supporting 4,000 infrastructure activities in 139 countries.
Since 1992, USTDA has supported over 75 activities in Nigeria, which have the potential to leverage nearly $15 billion in financing. Overall, USTDA support in Nigeria since 1992 has resulted in over $360 million total exports.
Workshops and Programs 2021-2022
- Hotspot Rural Telephony Feasibility Study: USTDA approved funding to Hotspot Network Limited for a feasibility study to assess the deployment of 2,000 mobile network base stations in select rural communities in Nigeria over a three-to-seven-year period. A U.S. company will be competitively selected by Hotspot to carry out the study.
- Aldreda Fields Open Access Fiber Network Feasibility Study: A USTDA grant to the Nigerian telecom company Aldreda Fields Limited funds a study to evaluate the deployment of broadband, specifically an aerial open-access FTTX network, in multiple neighborhoods across Lagos, including in the Abraham Adesanya Estate (approximately 500-600 homes). The study would also include a pilot of U.S. technology for the gigabit passive optical network equipment that would be used in the deployment of the project. The U.S. contractor, S2 Associates International, has been selected to carry out the study.
- ipNX Fiber Network Feasibility Study: A USTDA grant to the Nigerian internet service provider ipNX is funding a feasibility study to evaluate the technical and commercial viability of the expansion of the company’s fiber to the premises (FTTX) network to expand broadband connectivity to over 200,000 residential plots in Lagos and other major cities, including Abuja and Port Harcourt. In the study, U.S. contractor CCG Consulting is providing technical and financial expertise necessary to help attract financing for the project, as well as the specific design of the network for the project’s expected 5-year implementation.
- Sosai Sustainable Minigrids for Energy Access and Social Inclusion: USTDA is supporting a grant to Sosai Renewable Energies Company Limited for a feasibility study for the development of approximately 100 solar minigrids, and associated low voltage distribution network, in the Nigerian states of Kaduna, Plateau, and Kogi states. The project is anticipated to generate new renewable energy and provide energy access to thousands of women, farmers and others living in rural communities, creating greater social and economic inclusion and development. The U.S. contractor will be competitively selected.
- Darway Coast Energy Access Project: In FY 2020, USTDA approved funding for a feasibility study for Darway Coast Nig. Ltd, a privately-owned company in Nigeria, to develop approximately 95 mini-grids, including approximately 80 isolated mini-grids for communities and 15 distributed generation units for commercial, industrial, and institutional customers, primarily in southern Nigeria. The commercial, industrial, and institutional entities could include markets, hospitals, and other key social and economic entities that support resiliency. The project is expected to provide reliable and resilient energy access for an estimated 60,000 people living in communities not connected to the grid and/or being served by commercial, industrial, and institutional entities. U.S. contractor C J Aron Associates, Inc. DBA GreenMax Capital Advisors serves as the U.S. contractor.
- Access Africa Workshop: Access Africa is a partnership between USTDA and U.S. industry leaders to support the development of quality ICT infrastructure and services across Sub-Saharan Africa. Working with public and private sectors across the continent, Access Africa brings together critical stakeholders, and designs targeted programming to advance inclusive, secure, and sustainable connectivity. This workshop featured senior officials from the United States, South Africa, and Nigeria as well as industry leaders and covered topics ranging from innovative technologies such as Open RAN, issues in cybersecurity and connectivity, to healthcare technology. Date: July 26, 2021.
Reverse Trade Missions (RTM): USTDA will host a series of reverse trade missions to connect public and private decision-makers from Sub-Saharan Africa to U.S. ICT technology and service providers to support the region’s infrastructure development goals.
Nigeria Smart Grid Initiative Reverse Trade Mission – Expected to take place in 2022
USTDA approved funding to support a reverse trade mission and virtual workshop to introduce decision-makers from Nigeria’s power sector to U.S. technologies, services, and equipment for improved electricity transmission and distribution. This activity will highlight state-of-the-art U.S. smart grid technologies to manage the grid, reduce losses, increase efficiency, and integrate renewable energies and microgrid installations into energy systems.
Nigeria Satellite Technologies Reverse Trade Mission – Planned for August/September 2021
USTDA approved funding for a virtual and in-person reverse trade mission that will connect Nigerian satellite representatives with U.S. companies seeking to provide communication satellite technology and operation services to the Nigerian market. At this time, expected invited delegates would include representatives from the Ministry of Communications and Digital Economy, Nigerian Communications Satellite Ltd (NigComSat), as well as Nigerian private firms 21st Century Technologies and Content Oasis.
- Jillian Foerster, USTDA Country Manager for West Africa, based in Washington, DC firstname.lastname@example.org
- Clare Sierawski, USTDA Regional Manager for West Africa, based in Accra, Ghana email@example.com
- Joshua Egba, USTDA representative based in Lagos, Nigeria firstname.lastname@example.org
US African Development Foundation (USADF)
USADF has partnered with USAID and GE Africa to promote innovative solutions that develop, scale up or extend the use of proven technologies for off-grid energy, reaching communities not served by existing power grids. Through the “off-grid energy challenge”, grants up to $100,000 are awarded to African companies and organizations. To date, approximately nine grants have been issued in Nigeria for mini-grids, solar, biomass and hydro projects supporting grain milling, cold storage, and other small commercial enterprises.