FSD Africa Investments (FSDAi), the investment arm of UK-backed FSD Africa and a specialist development finance investor, has announced a strategic commitment of £10 million (US$13 million) into the Climate and Transition Infrastructure Fund (ACT Fund) managed by ARM-Harith Infrastructure Investment Limited. This landmark investment aims to unlock and mobilise domestic institutional capital—particularly from Nigerian pension funds—toward urgently needed climate-resilient infrastructure projects across Africa.
ARM-Harith Infrastructure Investment Limited, one of Africa’s leading private equity firms focused on sustainable infrastructure, manages the ACT Fund with a mission to drive inclusive economic growth through climate-aligned investments in key sectors such as clean energy, sustainable transport, water systems, and digital infrastructure.
This investment marks a pioneering approach in the African infrastructure investment landscape. Traditionally, Nigerian pension funds and other institutional investors have faced significant structural and financial barriers to participating in infrastructure equity financing—particularly due to the long lock-up periods and limited early-stage liquidity typically associated with such investments.
To address this challenge, ARM-Harith and FSDAi have introduced a unique liquidity-enhancing mechanism that will allow pension funds to invest in infrastructure projects while benefiting from predictable interim distributions during the early years of investment. This design not only de-risks long-term commitments but also aligns better with the liquidity profiles and risk appetites of institutional investors.
In a further innovative step, 75 per cent of FSDAi’s facility will be provided in local currency, representing a first-of-its-kind approach in the Nigerian market. This bold move is designed to shield domestic investors from foreign exchange volatility—a major deterrent to long-term local investment in infrastructure—and create a more stable and attractive investment environment.
By facilitating local-currency financing and enhancing liquidity options, this strategic injection by FSDAi supports broader efforts to deepen Africa’s financial markets and create more inclusive pathways for long-term institutional investment in the green economy.
“This investment reflects FSDAi’s strong commitment to accelerating Africa’s green economic transition by unlocking domestic capital markets for sustainable infrastructure. Through our support for the ACT Fund, we aim to demonstrate how well-structured financial instruments can de-risk investments and crowd in local pension funds to play a vital role in building climate-resilient economies,” said Anne-Marie Chidzero, Chief Investment Officer at FSDAi.
The ACT Fund is specifically structured to align with global and African climate goals, including the African Union’s Agenda 2063 and the Paris Agreement, by investing in infrastructure that enhances climate adaptation and low-carbon development pathways. From clean energy grids to digital infrastructure that supports smart city development, the fund is poised to generate significant impact in terms of job creation, emissions reduction, and long-term economic resilience.
With this investment, FSDAi and ARM-Harith are sending a strong signal to both the public and private sectors that sustainable infrastructure finance is not only necessary but also possible through innovative local capital mobilisation strategies. This collaboration also opens the door for replication across other African markets, helping to build a continent-wide ecosystem where institutional capital can flow into critical infrastructure with confidence and reduced risk.
The ACT Fund’s early success may serve as a blueprint for future infrastructure finance models across Africa, where trillions of dollars are needed to close the climate and infrastructure investment gap—and where unlocking local capital is essential to achieving lasting, African-led solutions.
