ARM-Harith Infrastructure Investments has secured $76 million at the first close of its Climate Transition Fund, marking a step in efforts to mobilise African pension capital for infrastructure and energy projects across the continent.
The Lagos-based private equity firm, which specialises in sustainable infrastructure investments, is targeting a final close of $200 million for the fund.
Unlike many traditional infrastructure vehicles, the Climate Transition Fund combines both US dollar and local currency investments within a single structure, to address one of the biggest barriers preventing African institutional investors from participating in infrastructure financing.
“With our first fund, we demonstrated that domestic institutional capital can be mobilised into infrastructure equity,” Rachel Moré-Oshodi, ARM-Harith’s chief executive officer, said. “With this successor fund, we are building on that foundation by bringing local and hard-currency capital together within a single platform.”
What You Need to Know
The fund’s first close attracted support from the African Development Bank’s Sustainable Energy Fund for Africa (SEFA) and FSD Africa Investments, which jointly committed $20 million as catalytic capital.
Such investments are often deployed to absorb part of the risk associated with early-stage infrastructure investments, making the fund more attractive to commercial investors.
The fundraising comes at a time when African governments are struggling to bridge a development financing gap estimated at more than $400 billion while demand for power, transport, telecommunications, and digital infrastructure continues to rise.
Across Africa, pension funds and collective investment schemes manage approximately $600 billion in long-term savings. In theory, these pools of capital should be well suited to infrastructure investments, which typically generate stable cash flows over long periods.
In practice, however, only a small fraction of those assets have found their way into infrastructure projects.
ARM-Harith believes the problem is not a lack of capital but a lack of investment structures designed around the realities facing local institutional investors.
Solving the Currency Mismatch Problem
One of the biggest obstacles preventing pension funds from investing in infrastructure is currency risk.
Many infrastructure funds operating across Africa are denominated in US dollars, while the underlying assets generate revenue in local currencies. When local currencies depreciate against the dollar, investors can suffer significant losses even if the project performs operationally.
This mismatch has made many pension fund managers cautious about allocating capital to infrastructure equity.
ARM-Harith’s Climate Transition Fund seeks to address that challenge by allowing both local-currency and hard-currency investments within the same vehicle. The structure enables domestic investors to participate without assuming unnecessary foreign exchange exposure while maintaining flexibility for international investors seeking dollar-denominated returns.
The approach reflects a growing trend within African infrastructure finance, where development finance institutions are increasingly positioning themselves as catalysts rather than primary financiers.
The New Role of Development Finance Institutions
Across the continent, development finance institutions are changing how they deploy capital.
Rather than acting as dominant investors, many DFIs now focus on using concessional funding, guarantees, and anchor investments to attract domestic and commercial capital into infrastructure projects.
The strategy has gained momentum over the past decade.
The African Development Bank’s Africa50 platform, launched in 2015, was designed specifically to crowd African institutional capital into infrastructure projects. Since then, it has supported major developments including Rwanda’s Kigali Innovation City and Egypt’s Benban Solar Park while growing assets under management beyond $1.4 billion.
Similarly, the International Finance Corporation introduced its Catalytic First Loss Guarantee Facility in 2025 to encourage lending into underserved sectors by absorbing part of the credit risk faced by financial institutions.
The Emerging Africa and Asia Infrastructure Fund (EAAIF) has also adopted a similar model, using development finance commitments as anchor capital to attract commercial lenders into large-scale infrastructure projects.
For many investors, these structures help address concerns around project risk, liquidity, and investment horizons.
Why This Matters for Africa’s Digital Economy
The significance of ARM-Harith’s new fund extends beyond traditional infrastructure sectors.
As Africa’s digital economy continues to expand, demand is increasing for the physical infrastructure that underpins technology ecosystems. Data centres, fibre optic networks, telecommunications towers, renewable energy facilities, embedded power systems, and logistics networks all require large amounts of patient capital.
Unlike venture capital, which is designed to generate returns over shorter time horizons, pension funds are naturally aligned with long-term infrastructure projects that can take years to mature.
Industry observers increasingly believe that future growth across Africa’s technology ecosystem will depend as much on infrastructure investment as startup funding.
Reliable electricity, affordable broadband connectivity, modern logistics systems, and resilient digital infrastructure have become essential requirements for economic growth and digital transformation.
Building on a Proven Track Record
ARM-Harith enters this fundraising effort with an established track record in infrastructure investing.
Its first vehicle, ARM-Harith Infrastructure Fund I, achieved its first close in 2015 and invested across transport and energy assets in West Africa, including projects in Nigeria and Ghana.
According to the firm, investments from the first fund supported more than 700 megawatts of installed power capacity, created approximately 22,500 jobs, and helped avoid an estimated 2.6 million tonnes of carbon emissions annually.
Recent investments have increasingly focused on decentralised energy solutions, including mini-grid projects and embedded power systems designed to address persistent electricity shortages across African markets.
Among them are AD Power HoldCo’s distributed renewable energy projects serving communities in Nigeria and Prime Meridian, a Ghanaian port infrastructure development aimed at strengthening maritime trade across West Africa.
Can Pension Funds Become Africa’s Infrastructure Financiers?
Experts say the success of ARM-Harith’s Climate Transition Fund could offer an important test case for the future of infrastructure financing on the continent.
If the fund succeeds in attracting meaningful participation from African pension funds, it could demonstrate that domestic institutional capital can play a far larger role in financing infrastructure than it has historically.
Such a shift would help reduce dependence on foreign capital while creating a more sustainable funding model for the power, transport, energy, and digital infrastructure projects required to support Africa’s long-term economic growth.
For ARM-Harith, the broader ambition goes beyond raising another infrastructure fund. The company is effectively testing whether Africa can finance more of its own future using the continent’s growing pool of long-term savings.
Talking Points
It is encouraging to see ARM-Harith attempting to solve one of Africa’s biggest infrastructure financing challenges: how to mobilise domestic capital for long-term development projects.
For years, African infrastructure has relied heavily on foreign investors and development finance institutions. While that capital has been essential, it has also exposed projects to funding constraints and external market conditions. Bringing African pension funds into the equation could create a more sustainable financing model.
What stands out is the fund’s blended local and hard-currency structure. Currency mismatch has long discouraged pension funds from investing in infrastructure, even when the projects themselves generate stable long-term returns. Addressing that issue could unlock significant institutional capital currently sitting on the sidelines.
At Techparley, we see this as more than an infrastructure story. Reliable power systems, data centres, fibre networks, telecom towers, and logistics assets are increasingly the foundation upon which Africa’s digital economy will be built. Without patient capital, scaling these assets becomes difficult.
The broader significance is that Africa’s pension industry manages hundreds of billions of dollars in long-term savings. If even a small portion of that capital is redirected into productive infrastructure, the impact on economic growth, job creation, and digital transformation could be substantial.
However, attracting pension funds at scale will require more than innovative fund structures. Regulators, fund managers, and policymakers must continue building confidence through transparency, governance, risk management, and a track record of successful exits and returns.
If ARM-Harith succeeds, it could help establish a blueprint for how African capital finances African infrastructure. That would not only reduce dependence on foreign funding but also strengthen the continent’s ability to build the energy, transport, and digital networks needed for long-term growth.
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