The Infrastructure Concession Regulatory Commission (ICRC) has issued new guidance on Public-Private Partnerships (PPPs), including the PPP Financial Model Guide 2025. This is a significant step towards standardising how PPP projects are evaluated and structured in Nigeria.
The Guide aims to foster transparency, strengthen investor confidence, and give PPP projects a structured framework for financial modelling.
In this newsletter, we examine the Guide’s key provisions and critically assess their legal and commercial implications for Nigeria’s evolving PPP framework.
Why the ICRC Financial Model Guide matters
The ICRC has shaped PPP policy since the 2005 ICRC Act. In 2018 it issued the PPP Manual. That Manual covered project identification, business cases, procurement and contract management. It recognised financial models, yet it set no detailed method. As a result, models varied widely. Investor confidence suffered. The 2025 Guide closes that gap. For the first time, it codifies how sponsors prepare, test and present a PPP financial model.
What every PPP financial model must contain
The Guide sets minimum content for each model. A model starts with project scope. The sponsor states the purpose and objectives, then names the stakeholders and their roles. Next comes the contractual model, such as build-operate-transfer. Finally, the model defines the full construction and operations timeframe.
Revenue and cost assumptions come next. The model sorts revenue into user-pay, government-pay or hybrid. It also captures ancillary income and growth assumptions for inflation and GDP. On costs, it separates capital from operating spend, and fixed costs from variable ones. It holds contingency and buffer provisions. Sensitivity analysis then tests base, best and worst cases.
The financing section sets the split between equity and debt. For debt, it states the interest rate, the tenure and the repayment schedule. It can also add grants, guarantees or viability gap funding to lift bankability. Separately, the tax section fixes the tax framework, ties depreciation to asset life, and reflects any tax incentives.
Metrics, fees and ICRC review
Every model reports a defined set of metrics. The Debt Service Coverage Ratio should sit above 1. The model also shows WACC, IRR, Net Present Value, the Profitability Index, Value for Money against a Public Sector Comparator, Return on Equity and the Payback Period.
The Guide also covers payments to government. Revenue sharing applies to user-pay and hybrid PPPs. It does not apply to government-pay PPPs, and the Guide sets no fixed percentage. On top of that, PPP projects pay ICRC fees. There is a one-off entry fee of up to 5% and an annual fee of 1% of gross revenues, both stated in the Concession Agreement. The Guide does not say whether that 1% fee forms part of the government’s revenue share. Parties should therefore settle the point in the project documents.
Before a sponsor submits the model, an independent auditor must review it for accuracy, logic and completeness.
Our assessment of the ICRC Financial Model Guide
The Guide gives sponsors and lenders welcome clarity. It also aligns Nigerian practice with international standards. However, the extra detail may raise transaction costs and lengthen preparation. Some sections overlap too, such as cash flows and financial statements, and the ICRC could merge them. The ICRC’s mandate does not reach state-level PPPs. Even so, the Guide reads as a model that state governments can adopt to harmonise standards. Our analysis of the ICRC PPP Regulatory Notice covers the approval side of the same reform, and our note on the Nigerian Ports Economic Regulatory Agency (NPERA) Act, 2026 shows how sector regulation is being rebuilt alongside it.
Click the button above to read our full analysis of the ICRC Financial Model Guide and what it means for PPP sponsors and investors in Nigeria.