The Federal Government has recently celebrated the financial close of USD 1.126 billion in financing for the execution of Phase 1, Section 2 of the Lagos–Calabar Coastal Highway, marking a major milestone in the delivery of one of Africa’s most ambitious and transformative infrastructure projects.
The financing was fully underwritten, with Afreximbank underwriting USD 500 million and First Abu Dhabi Bank (FAB) underwriting the remaining USD 626 million, with partial risk mitigation support provided by the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC). This transaction marks ICIEC’s first Nigerian operation since the country’s recent institutional and regulatory reforms and reflects growing international confidence in Nigeria’s reformed investment climate and capacity to deliver large-scale infrastructure.
SkyKapital acted as Lead Financial Advisor, coordinating the structuring, lender engagement, and execution of the transaction. Environmental and Social advisory services were provided by Earth Active (UK), ensuring full alignment with the IFC Performance Standards, the Equator Principles, and international ESG best practices. Hogan Lovells, as International Legal Counsel, and Templars, as Nigerian Legal Counsel, led the legal advisory work.
This financing is particularly notable as it represents one of the largest fully underwritten road infrastructure transactions in Nigeria, with both Afreximbank and FAB committing on a full underwriting basis. The ICIEC-supported component also makes it one of the largest transactions backed by ICIEC since the institution’s creation.
President Bola Ahmed Tinubu applauded the Federal Ministries of Finance and Works, as well as the Debt Management Office (DMO), for their close coordination in delivering the transaction. He reaffirmed the Federal Government’s commitment to exploring innovative and sustainable financing mechanisms to accelerate the delivery of critical infrastructure across the country.
With this achievement, the Lagos–Calabar Coastal Highway project will continue without interruption.
Phase 1, Section 2 spans approximately 55.7 kilometres, connecting Eleko in Lekki to Ode-Omi, key economic corridors that significantly enhance national trade efficiency, regional connectivity, and logistics performance.
This successful financing follows the earlier close of USD 747 million for Phase 1, Section 1, achieved on 9 July 2025, further confirming the strong bankability of the Lagos–Calabar Coastal Highway project. Collectively, these two financings mean that the project has attracted nearly USD 2 billion in Foreign Direct Investment (FDI) into Nigeria.
The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, described the transaction as a defining moment in Nigeria’s infrastructure journey, stating that the funds will be deployed responsibly and judiciously to deliver the project within stipulated timelines.
These landmark transactions firmly establish the Lagos–Calabar Coastal Highway as one of the flagship projects of President Tinubu’s Renewed Hope Agenda, reflecting the administration’s commitment to bold, transformational, and economically catalytic infrastructure.
Construction of the Lagos–Calabar Coastal Highway is being executed by Hitech Construction Company Limited, whose rapid mobilisation, early opening of key road sections, and quality of execution have drawn commendation from lenders for engineering excellence, operational discipline, and delivery speed.
A comprehensive Value-for-Money (VfM) assessment was conducted by the Federal Ministry of Works, in close coordination with SkyKapital, and was independently reviewed and confirmed by GIBB, in line with the Federal Government’s commitment to transparency, accountability, and fiscal discipline.
The successful close of Phase 1, Section 2 represents a clear step-change in market confidence and demonstrates Nigeria’s ability to move decisively from vision to execution, and from reform to delivery, under the Renewed Hope Agenda.
When the project was first announced, some critics alleged inflated costs and an undue burden on government finances. Such criticisms failed to appreciate the project’s financing structure. The Lagos–Calabar Coastal Highway is being executed under an Engineering, Procurement, Construction and Financing (EPC+F) model, under which the Federal Government contributes only 30% of the project cost, while the remaining 70% is financed by investors sourced by the contractor and recovered through tolling revenues.
Reputable international financial institutions do not commit capital to inflated or poorly structured projects. These lenders carried out independent technical, financial, and legal due diligence before investing.
The engineering expertise, professionalism, and execution capacity demonstrated by Hitech Construction Company Limited played a decisive role in building investor confidence and enabling the transaction.
The funding model adopted for the Lagos–Calabar Coastal Highway offers a replicable blueprint that state governments can adopt to accelerate infrastructure delivery and crowd in private capital across Nigeria.
ABOUT THE AUTHOR:
Isah,
former president, Nigerian Guild of Editors, lives in Lagos.