Report: Federal Government Secures $1.2 Billion Financing for Phase One of Lagos–Calabar Highway Project

Report: Federal Government Secures $1.2 Billion Financing for Phase One of Lagos–Calabar Highway Project

1. Introduction

The Federal Government of Nigeria has successfully secured approximately $1.26 billion in financing to advance the Phase 1, Section 2 construction of the Lagos–Calabar Coastal Highway — one of the country’s most ambitious infrastructure projects aimed at boosting connectivity along the southern economic corridor and enhancing national development. (TheCable)

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2. Background of the Lagos–Calabar Coastal Highway Project

The Lagos–Calabar Coastal Highway is a flagship infrastructure initiative of the Federal Government, planned to span about 700 kilometres across Nigeria’s southern coastline, linking major economic centres from Lagos in the west to Calabar in the east. This transformative corridor is designed to improve logistics, expand commerce, promote regional integration, and reduce travel times between southern states. (TimesNG.com.ng)

Phase 1 of the project has been divided into sections, with Section 1 previously financed through a $747 million syndicated loan and now successfully followed by the latest financing for Section 2. (TheCable)

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3. Details of the Financing Agreement

On 19 December 2025, the Federal Ministry of Finance, in collaboration with the Ministry of Works and the Debt Management Office (DMO), closed approximately $1.26 billion in financing for Phase 1, Section 2 of the project. President Bola Ahmed Tinubu described the closing of this financing deal as a “major achievement” and reiterated the government’s commitment to leveraging innovative funding options for critical infrastructure delivery. (The Nation Newspaper)

Key aspects of the financing include:

• 📌 Amount Secured: About $1.26 billion

• 📌 Section Covered: Phase 1, Section 2 — approximately 55.7 km, linking Eleko in Lekki to Ode-Omi

• 📌 Lead Underwriters:

  • First Abu Dhabi Bank (FAB) — $262 million

  • Afreximbank — $500 million

• 📌 Risk Mitigation Support: Partial coverage provided by the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) — the largest ICIEC-supported transaction to date. (The Nation Newspaper)

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4. Strategic Importance of the Highway

The Lagos–Calabar Coastal Highway is anticipated to be a transformational backbone for Nigeria’s transport infrastructure, offering:

• Enhanced Regional Connectivity: Linking key economic hubs across nine southern states. (Nairametrics)

• Reduced Travel Time and Costs: Providing an efficient alternative to existing routes. (TimesNG.com.ng)

• Improved Trade and Logistics: Supporting seamless movement of goods and people, stimulating economic activity. (The Nation Newspaper)

• Job Creation: Both through construction and subsequent commercial opportunities along the corridor. (Nairametrics)

The project is aligned with the Renewed Hope Agenda, the federal government’s broader agenda for infrastructure expansion, economic reform, and private-sector participation in national development. (The Nation Newspaper)

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5. Project Execution and Oversight

Execution of the highway construction is being led by Hitech Construction Company Limited, which has been instrumental in progressing early sections. The financing transaction was coordinated by SkyKapital as Lead Financial Advisor, with legal support from Hogan Lovells (International Counsel) and Templars (Nigerian Legal Counsel). ESG (Environmental, Social, and Governance) advisory was provided by Earth Active (UK) to ensure compliance with IFC Performance Standards and the Equator Principles — reflecting a strong commitment to sustainable and responsible project delivery. (DAILY TIMES Nigeria)

Additionally, a comprehensive Value-for-Money (VfM) assessment was conducted, confirming the project’s economic viability and alignment with fiscal discipline. (DAILY TIMES Nigeria)

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6. Government and Stakeholder Perspectives

President Tinubu has lauded the transaction, highlighting its role in maintaining project momentum and unlocking further investment for national infrastructure. He emphasized that the government will continue to pursue creative financing mechanisms to deliver priority projects across Nigeria. (The Nation Newspaper)

Finance Minister Wale Edun stated that the financing deal represents a “defining moment” in Nigeria’s infrastructure journey — marking the first fully underwritten transaction of such magnitude for a Nigerian road project, and underlining growing confidence among international investors. (The Nation Newspaper)

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7. Conclusion

The securing of $1.26 billion for Phase 1, Section 2 of the Lagos–Calabar Coastal Highway represents a significant milestone in Nigeria’s ongoing infrastructure expansion. With strategic financing, international support, and a clear framework for execution and oversight, the project is positioned to deliver long-term economic benefits, enhance transportation efficiency, and catalyse socio-economic development across the southern geopolitical zones of the country. (The Nation Newspaper)