Nigeria plans to channel $460m, representing about 92 per cent of a $500m World Bank loan, into the capitalisation of a proposed fibre infrastructure company set up to deploy 90,000 kilometres of climate-resilient broadband fibre across the country.

This is contained in the Financing Agreement for the Building Resilient Digital Infrastructure for Growth project between the Federal Government and the International Development Association, the concessional lending arm of the World Bank.

Under the agreement, the World Bank approved a $500m concessional credit to support Nigeria’s drive to expand access to high-quality and climate-resilient broadband internet in unserved and underserved areas.

Of this amount, $460m is earmarked specifically for equity financing and capitalisation of a new Project Company that will drive the fibre rollout. The remaining $40m will cover goods, works, consulting and non-consulting services, training, operating costs, and the refund of a preparation advance used to develop the project framework.

According to the document, the proposed Project Company will be established “as an independent, majority privately-owned and managed special purpose vehicle-joint venture with the objective of the deployment of 90,000 kilometres of climate-resilient fibre infrastructure following a phased approach, limited to provision of wholesale, open access services to licensed telecommunications operators, and management of associated investments, including the carrying out of preparatory activities and provision of transaction advisory services, and provision of equity financing in and capitalization of the Project Company.”

The Federal Government will participate in the company as a shareholder through the Ministry of Finance Incorporated, which manages the government’s investment interests. However, the agreement explicitly caps the government’s shareholding at a maximum of 49 per cent, ensuring that the company remains majority privately owned.

The $460m equity injection is broken into four tranches, tied to strict performance and operational milestones. The first tranche of $150m will be released once the Project Company is incorporated as a joint venture with private partners selected through a process acceptable to the World Bank, and after its memorandum, articles of association, and shareholding agreement are approved.

A second tranche of $100m will only be disbursed after the company adopts fiduciary and administrative procedures approved by the lender and completes at least 5,000 kilometres of fibre deployment. The third tranche of $100m is linked to the completion of an additional 20,000 kilometres of network construction.

The final tranche of $110m will be released after the company launches wholesale open-access services through a published reference offer and completes a further 40,000 kilometres of fibre deployment, bringing the total rollout to at least 65,000 kilometres before the final equity drawdown.

Once each tranche is withdrawn, the agreement requires that the funds be transferred to the Project Company’s dedicated account within five working days, showing the equity nature of the financing rather than traditional budgetary spending.

The project will be implemented under the oversight of the Federal Ministry of Communications, Innovation and Digital Economy, and the Federal Ministry of Finance will receive semi-annual progress updates.

A dedicated Project Implementation Unit will manage day-to-day execution, with overall financial management handled by the Federal Project Financial Management Department in the Office of the Accountant General of the Federation.

Beyond the fibre rollout, the project also includes technical assistance to federal government agencies to support the use of high-quality broadband in targeted areas, as well as funding for project management, monitoring and evaluation, environmental and social safeguards, grievance redress mechanisms and independent audits.

The agreement places strong emphasis on environmental and social standards, requiring compliance with an Environmental and Social Commitment Plan. It also mandates the establishment of an accessible grievance mechanism for affected communities and strict reporting obligations to the World Bank.

Repayment of the credit will begin in October 2030, with Nigeria repaying 2.5 per cent of the principal every six months until April 2050. The credit attracts a concessional interest charge set at the reference rate plus a variable spread, minus 250 basis points.

Sunday PUNCH further observed that the World Bank approved the $500m Building Resilient Digital Infrastructure for Growth loan for Nigeria on October 6, 2025, to significantly boost broadband access across unserved and underserved areas of Nigeria.

With a total cost estimated at $1.6bn, the World Bank will contribute $500m through a concessional credit from the International Development Association, while the remaining funds will come from private-sector sources.

In May 2024, The PUNCH reported that the Federal Government approved a special-purpose vehicle to support the delivery of an additional 90,000km of fibre-optic cable for universal internet access across Nigeria.

An SPV is a separate legal entity created to achieve a specific goal or project. In this context, the SPV will manage the fibre optics project, overseeing its implementation, finances, and operations.

The Minister of Communications, Innovation, and Digital Economy, Bosun Tijani, said in a statement that the project would strengthen the national backbone for internet access and optimise the use of eight submarine cables already landed in Nigeria.

Tijani also announced in August 2025 that Nigeria was moving closer to building one of the largest digital backbones in the developing world. He unveiled the technical design for Project BRIDGE — a $2bn fibre-optic expansion initiative that will extend Nigeria’s broadband network from 35,000 to over 125,000 kilometres.

The rollout plan includes seven main fibre rings connecting Nigeria’s six geopolitical zones with Lagos, along with 37 city-level fibre loops, 77 regional networks, and multiple edge data centres.

“Over the past two years, we have worked tirelessly on what is arguably the most ambitious and foundational digital infrastructure project in Nigeria’s history, Project BRIDGE,” Tijani said.

Earlier, it was disclosed that the implementation of BRIDGE will be carried out through a Special Purpose Vehicle, with the Federal Government holding a 51 per cent equity stake, and private investors holding 49 per cent. However, the loan agreement limits the government’s equity shares to 49 per cent.

Apart from the World Bank’s contribution, funding commitments include $200m from the African Development Bank, along with anticipated investments from the European Investment Bank, the Islamic Development Bank, and various private-sector players.

The BRIDGE loan adds to Nigeria’s growing portfolio of World Bank-supported programmes. As of June 30, 2025, Nigeria’s external debt stood at $46.98bn, according to the Debt Management Office.

The World Bank Group remains Nigeria’s largest single creditor, accounting for $19.39bn of the total, comprising $18.04bn from the IDA and $1.35bn from the IBRD. This represents 41.3 per cent of the country’s external debt, underscoring the bank’s dominant role in financing Nigeria’s development initiatives.