ARM-Harith Infrastructure Investment Limited, in collaboration with FSD Africa Investments (FSDAi), has introduced a GBP 10 million initiative aimed at empowering local pension funds to participate in Nigeria’s infrastructure equity development.
Rachel Moré-Oshodi, CEO of ARM-Harith, explained, “Local pension funds have long faced barriers to accessing infrastructure equity due to liquidity concerns and risk perception.
Our partnership with FSDAi has allowed us to create an innovative solution that mitigates these risks while providing both immediate liquidity and long-term capital growth for pension fund investors.”
The commitment will be directed towards the ARM-Harith Climate and Transition Infrastructure Fund (ACT Fund), a fund focused on supporting climate-resilient infrastructure initiatives.
FSDAi, a UK-backed development finance organization, is actively contributing to this initiative to mobilize domestic capital and address the structural hurdles preventing Nigerian pension funds from investing in infrastructure equity.
A standout feature of this collaboration is the creation of a financing structure that allows Nigerian pension funds to invest in infrastructure while ensuring early liquidity.
This innovative structure guarantees interim returns during the initial phases of the investment, which has been a significant hurdle for pension funds previously reluctant to participate in infrastructure equity due to a lack of early-stage returns.
Additionally, 75% of FSDAi’s GBP 10 million commitment will be made in local currency, the first time such a structure has been implemented in Nigeria.
This development is designed to reduce the foreign exchange risks that have previously deterred local investors.
The new structure is projected to unlock an additional GBP 31 million in investments from Nigerian pension funds, nearly five times the amount mobilized for ARM-Harith’s first fund.
FSDAi’s Chief Investment Officer, Anne-Marie Chidzero, shared her enthusiasm: “This collaboration with ARM-Harith demonstrates how risk-bearing capital can be effectively structured to unlock domestic institutional investment.
It’s a model that strengthens Africa’s financial markets and channels investment into sustainable, green economic growth across the continent.”
Mr. Jonny Baxter, the British Deputy High Commissioner in Lagos, expressed support for the initiative: “The UK government is committed to fostering the development of Nigeria’s financial sector through both bilateral partnerships and investment mechanisms that drive the growth of domestic capital markets and promote long-term economic development.”
