Lagos State Taps Bond Market for ₦250bn Infrastructure Financing Round

Lagos State has mandated two leading investment banks to arrange a ₦250 billion bond issuance, the state's largest debt capital markets transaction in over five years, as Governor Babajide Sanwo-Olu's administration accelerates its infrastructure spending programme.

Chapel Hill Denham and Stanbic IBTC Capital have been appointed joint lead managers for the issuance, which is expected to price in the secondary market over the coming weeks, according to sources familiar with the transaction.

**What the Money Is For**

Proceeds from the bond will primarily fund two major infrastructure projects. The first is the extension of the Blue Line rail from its current Marina terminus westward to Badagry, a project that has long been promised but lacked funding. The second is an inner-city road rehabilitation and expansion programme covering some of Lagos Island's most congested arterial routes.

The state government has described both projects as essential to Lagos's long-term economic competitiveness and its ability to manage rapidly growing urban traffic.

**Bond Structure**

The issuance is structured as a seven-year fixed-rate bond, with interest to be paid semi-annually. The state's debt management office has confirmed that the bond will be backed by internally generated revenues, which have grown significantly in recent years as the state expanded its tax base and streamlined collection.

**Market Appetite**

Institutional investors have shown strong interest, according to sources close to the deal. Pension fund managers, insurance companies, and fund managers with long-term liabilities are expected to anchor the order book.

Lagos State has maintained an investment-grade rating from local credit rating agencies, which has helped it access capital markets at competitive rates relative to peers.

**Scrutiny and Accountability**

Civil society groups and Lagos residents have called on the state government to publish detailed project plans and a clear disbursement schedule to ensure bond proceeds are used exclusively for the stated purposes.