First Abu Dhabi Bank (FAB) and Afreximbank have closed the funding gap for the Lagos-Calabar Coastal Highway, providing a USD 1.1 bn facility that allows construction to proceed on the critical link to the Lekki Deep Sea Port.

The details: FAB will underwrite USD 626 mn while Afreximbank will cover USD 500 mn. The capital is ring-fenced to build section two of the first phase of the Lagos-Calabar Coastal Highway.

The de-risking mechanism: The project reportedly secured a credit ins. wrapper from the ins. arm of the Islamic Development Bank, the Islamic Corporation for the Ins. of Investment and Export Credit (ICIEC) — allowing commercial lenders like FAB to bypass standard Nigerian sovereign risk ratings since ICIEC maintains a high credit rating.

Why this matters

The transaction could offer a blueprint for how UAE capital enters Africa. The structure — pairing a UAE commercial heavyweight (FAB) with a multilateral anchor (Afreximbank) and an ICIEC risk wrapper — creates a replicable model for the India-MENA-Africa corridor. It allows Gulf capital to capture the upside of African infrastructure development while insulating the balance sheet from direct sovereign volatility.

How it works: Standard Nigerian risk ratings often make long-tenor infrastructure loans expensive for commercial banks. The ICIEC wrapper allows FAB to effectively import a high credit rating into the transaction, de-risking the project in a mechanism known as “rating substitution.”

This means less tied-up capital for FAB: Under the Basel global banking rules, this will enable FAB to move this USD 626 mn exposure from a 100% risk-weighting to just 20% — freeing up nearly 80% of the capital they would otherwise have to lock away to cover the loan’s risk

What’s next?

With the liquidity event concluded, the focus turns to the construction timeline. The urgent requirement is to align the road’s completion with the port’s ramping import schedules to avoid a capacity mismatch between its deep-sea maritime infrastructure and its landside evacuation network.

Keep an eye on future rail Integration: While the road development will support middle and last-mile delivery to Lagos hubs, rail integration — which is planned as part of the port project’s larger design — will be key to connecting the port to the eastern industrial heartlands and the Cameroon border.

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