TLG Capital, a leading alternative investment firm, has announced a US$10 million structured private credit facility dedicated to climate financing for one of Nigeria’s largest aluminium recyclers.
This transformative initiative is a collaborative effort with Wema Bank, Nigeria’s foremost innovative financial institution and the pioneer of Africa’s first fully digital bank, ALAT.
The strategic climate finance transaction is set to revolutionise the aluminium recycling industry in Nigeria. TLG Capital’s commitment to investing in the country, despite prevailing currency and macroeconomic challenges, underscores its dedication to sustainable development.
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Over the next five years, the investment will enable the recycling of metal equivalent to three Eiffel Towers, achieving a remarkable 95% reduction in CO2 emissions compared to primary sourced aluminium. The project is poised to become Nigeria’s largest and first industrial-scale aluminium recycler, significantly reducing the nation’s carbon footprint. The anticipated environmental impact is substantial, with the five-year carbon footprint reduction equivalent to removing 100,000 passenger vehicles off the road. This initiative also offers a superior dollar-for-dollar emissions reduction, approximately twelve times more effective than financing solar PV energy in the region and will generate 200 jobs for local Nigerians.
Strategic Partnerships and Local Expertise
A core element of TLG’s strategy is forming strategic partnerships with reputable Nigerian national banks like Wema Bank. While many investors shy away from Nigeria due to currency fluctuations and broader macroeconomic issues, TLG Capital is making significant strides in the Nigerian economy. By involving Wema Bank from the outset, TLG addresses the often-problematic issue of investment exits.
This collaboration aims to help clients achieve maximum success, growth, and operational flexibility. Wema Bank’s local knowledge and expertise in the Nigerian financial services industry are pivotal to ensuring a smooth transition, sustained support throughout the investment lifecycle, and maximal impact for this investment.
To guarantee success, TLG has implemented a rigorous 100-day plan, placing a dedicated representative on the ground. This individual is tasked with verifying financial information, monitoring adherence to the business plan, and conducting regular ESG (Environmental, Social, and Governance) and impact assessments on the company.
Confidence in Nigeria’s Potential
The collaboration highlights TLG’s confidence in Nigeria’s potential and its dedication to driving economic growth and environmental sustainability in the nation. TLG Capital eschews traditional private equity models in favour of financing solutions tailored to the unique market dynamics of Nigeria and Africa. This approach ensures that investments are both relevant and impactful, aligning with the specific needs and conditions of the local economy.
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By providing long-term capital to high-potential borrowers and aligning their financing structure with the company’s success, this partnership creates a win-win scenario for all parties involved. This approach fosters sustainable business growth and allows investors to participate in the upside of the company.
The deal was led by Aum Thacker at TLG Capital, supported by Johnnie Puxley and Christian Rezek. Deal and transaction advisors included ThirdWay Partners, Jadara Capital, Wigwe and Partners, Better Finance, and HT Legal.
