The United Kingdom Nigeria Infrastructure Advisory Facility (UKNIAF)

The Situation

The use of Public-Private Partnerships (PPPs) and Private Sector Financing (PSF) of infrastructure in the delivery of public infrastructure and services has grown rapidly in Nigeria over the last twenty years. However, this has not necessarily translated into the creation of sustainable jobs, increased living standards and resilience to climate change that is possible with pro-poor, inclusive, climate-resilient PPPs. This is largely because these considerations were not hard-coded into the selection, prioritisation, development and implementation management of such projects.

The Solution

As part of the TetraTech International Development (formerly WYG) Consortium, Africa PPP Advisory Services is delivering the PPP/Infrastructure Financing Component of the DFID funded £72.8m technical assistance facility which aims to improve the lives of some of Nigeria’s poorest people by improving the way infrastructure is designed and delivered in the country.

UKNIAF aims to build on the solid foundations developed under NIAF2, with progress implementation in a more focused manner. The primary objective of the PPP/Infrastructure Financing Component is to develop a $3 billion pipeline of bankable PPP projects, at least $1 billion of which would be at or close to financial close by 2023. UKNIAF will also serve to ensure that Nigeria will have substantially improved processes for developing and assessing PPPs at the Federal and State levels.

UKNIAF also provides technical assistance to the Federal Government of Nigeria through the Federal Ministry of Finance, Budget, and National Planning (FMFBNP) to establish a clear linkage between priorities to be defined in the Medium-Term National Plan (MTNDP) and the annual capital budget.

Our Assistance

Acting as the key delivery partner for PPPs, our team led the development high-level UKNIAF Infrastructure Financing & Delivery Strategy (UKNIAF-IFDS) as part of the inception phase. This will be delivered in three main pillars:

• Pillar 1: Institutional & Human Capacity Development
• Pillar 2: Transaction Support/ Project Development
• Pillar 3: Project Financing & Credit Enhancement

This has now reached implementation phase, with key achievements in the following areas:

• Development and progression of $3bn project pipeline.
• Developed $7.2 billion pipeline of climate-smart PPP projects and associated processes, including Climate & PGESI risk-screening framework, Viability Gap Funding framework, Contingent Liability framework, Project Concept Note & OBC templates, training & capacity building workshops for public sector officers, as well as the development of the proposed Accelerated Project Delivery Framework and project Preparation Facility with DFI’s such as the World Bank/IFC, PIDG, BII, AfDB, GCF, Afrexim Bank and AFC
• Mobilized c$600m in grants and concessionary loan funding support from the AfDB and World Bank for a portfolio of climate-smart pipeline projects expected to raise in excess of $1bn in private sector capital in the coming years.
• Technical Assistance for the progression and development of an implementation structure for the AfDB’s $540m Special Agro-Processing Zone Project.
• Development of Project Concept Notes and Outline Business Case for the 1,400 Ha Green Agro-Allied Processing Zone Project in Kaduna State, Nigeria.
• Development of Outline Business Case for the 760 Ha Ijaiye Special Agro-Processing Zone Project in Oyo State, Nigeria.
• Contributed to the development of policy declarations in support of the transition to climate smart infrastructure in key policy instruments/documents such as the 2022 Budget Circular and the 2022–24 MTEF/FSP.
• Completed a central pipeline of MDA infrastructure project proposals from the 2022 Budget submissions to establish a list of PPP and public procurement priority projects.
• Collaborated with the NDC Partnership to develop a database of climate-smart infrastructure projects, climate finance providers, and capacity building resource providers.
• In collaboration with the NDC Partnership and DFIs, organized a Climate Finance Workshop that included the unveiling of the Climate Finance Database and the positioning of projects seeking financing support from relevant fund sources.
• Delivered a Climate Finance strategy to the Ministry of Finance (for formal consideration by the committee or relevant working group in shaping the 2023 Budget Process), outlining financing options, including climate financing, available for eligible FG projects to close funding gaps for priority infrastructure and incorporating key policy recommendations for implementation.
• Completed Phase 1 of the Capacity Development Plan (Climate-Smart Infrastructure Webinar and DST Workshop) to mainstream the use of DST as a method for enhancing capital project screening for inclusion in the 2023 budget completed in at least two infrastructure-heavy MDAs.
• Secured £1.5m for technical assistance to the Government of Nigeria for the mainstreaming of the NDC’s in the annual capital budget process. Which since 2021 has (a) established a climate finance database of projects for positioning for climate finance (b) established the institutional requirements to support the increase flow of climate finance for eligible projects (c) identified a pipeline of projects to be funded by the 2023 Green bond (d) working with NDC Partnership. Organized a Climate Finance Workshop held in partnership with the NDC Partnership and DFIs incorporating the launch of the Climate Finance Database and positioning of projects for funding support by relevant fund providers.
• Helped structure and secure £10m FCDO funding commitment for the Clean Energy Infrastructure Fund – a local currency blended finance facility for private sector investors sponsored by PIDG-funded InfraCredit
• Raised $520m funding support for 8 Special Agro-Industrial Procession Zones, co-funded by the African Development Bank (AfDB, Islamic Development Bank (IsDB) and the Infrastructure Fund for Agricultural Development (IFAD) (Client: Federal Ministry of Finance, Budget & National Planning).