FSD Africa Investments (FSDAi), a UK-supported specialist development finance investor, has announced a £10 million (₦21 billion) commitment to the ARM-Harith Climate and Transition Infrastructure Fund (ACT Fund)—a groundbreaking initiative designed to unlock local institutional capital for climate infrastructure in Nigeria.
The investment aims to address a long-standing challenge in Nigeria’s infrastructure financing landscape: the reluctance of domestic pension funds to invest in infrastructure equity due to liquidity risks and foreign exchange volatility.
The ACT Fund, managed by ARM-Harith Infrastructure Investment Limited, introduces a first-of-its-kind structure that enables early liquidity for pension fund investors through predictable interim distributions—an innovation expected to reshape the risk profile of infrastructure equity investments in Nigeria.
Further strengthening the innovation, 75% of FSDAi’s investment will be provided in local currency, a deliberate move to eliminate the forex risks that often discourage long-term investments from local institutions.
This strategic structure is projected to attract an additional £31 million from Nigerian pension funds—nearly five times what was mobilised under ARM-Harith’s first fund.
Speaking on the development, British Deputy High Commissioner in Lagos, Mr. Jonny Baxter, emphasised the UK’s commitment to bolstering Nigeria’s financial sector:
“Local currency capital helps mitigate the impact of foreign exchange volatility, narrows the financing gap and supports diversification into new asset classes and climate-related projects—while providing long-term funds to growing businesses.”
Anne-Marie Chidzero, Chief Investment Officer at FSDAi, highlighted the broader impact of the investment:
“This approach strengthens Africa’s financial markets and facilitates capital allocation towards sustainable, green economic growth across the continent.”
Rachel Moré-Oshodi, CEO of ARM-Harith, described the partnership as “a global first”:
“For too long, domestic pension funds have remained on the sidelines of infrastructure equity due to liquidity constraints and heightened perception of risk. This facility could fundamentally change how infrastructure equity is financed across Africa.”
The collaboration between FSDAi and ARM-Harith is being hailed as a pioneering model for leveraging private sector-led innovation to drive sustainable development and climate resilience in Africa.
