Page 202 - UUBO Deal Academy 2020 - Materials

MAKING A CASE FOR INVESTING IN

NIGERIAN PROJECTS: RISKS & MITIGANTS

• Political will aimed at ensuring that the tariff structure is enforced is a
non-economic factor that a PE fund needs to consider before investing
in any of these project types/businesses

• An example of apparent political will supporting efficient tariff
collection is the Lekki toll roads in Lagos

• Mitigants:

• A very clear tariff model and methodology which the investor
understands;

• Confirmation, through due diligence, that the tariff methodology has

been applied on a consistent basis.

• Consistency of regulators in making regulatory decisions and ensuring
that they are insulated from government interference; independence

• Availability of enhancement and other support in the form of partial
risk insurance and guarantees from institutions that are accustomed
to undertaking projects in emerging markets such as the WBG, MIGA,
DFC, ADB etc

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