AFC Capital Partners has launched its $150 million Infrastructure Climate-Resilient Fund in Nigeria after receiving regulatory approval from the Securities and Exchange Commission. The fund will target institutional investors and prioritise transport and renewable energy projects, as part of a wider $750 million pan-African climate initiative.
Key Overview
- Fund size: $150 million
- Market: Nigeria
- Focus: Climate-resilient infrastructure
- Priority sectors: Transport and renewable energy
- Target investors: Pension funds, insurers and sovereign wealth funds
- Pan-African initiative: $750 million
- Target project financing pool: $3.7 billion
- First investment: Expected before the end of 2026
- First-loss support: Green Climate Fund
AFC Launches $150 Million Climate-Resilient Fund in Nigeria
AFC Capital Partners, the asset management subsidiary of the Africa Finance Corporation, has launched its $150m Infrastructure Climate-Resilient Fund in Nigeria following regulatory approval from the Securities and Exchange Commission.
The formal signing ceremony, held in Lagos on Monday, established the SEC-registered closed-end vehicle to channel domestic institutional capital into critical green infrastructure across the country.
The Nigerian platform forms part of a larger $750m pan-African climate initiative and aims to unlock investments from pension fund administrators, insurance firms and sovereign wealth funds. The wider initiative is targeting an overall project financing pool of $3.7bn.
Fund Targets Institutional Investors
Speaking with journalists on the sidelines of the event, Chika Dotimi-Beke, Chief Financial Officer of AFC Capital Partners Nigeria Limited, said the immediate priority is capital raising and deployment.
“The primary goal is to bring investors into the fund. Today marks the approval of our license from the SEC, so our focus is now on onboarding institutional investors,” Dotimi-Beke said.
She added that capital deployment would follow quickly, with the fund anticipating its first investment before the end of the year.
“Once we achieve our first close for the Nigerian fund, we are set to prioritise investments in the transport and renewable energy sectors,” she said.
The focus on transport and renewable energy is intended to direct institutional capital toward infrastructure projects that can support Nigeria’s economic development while addressing climate-related risks.
Nigeria’s Domestic Investment Pool
Gbadebo Adenrele, Managing Director and CEO of Investment Banking at United Capital Plc, which served as financial adviser and issuing house for the transaction, highlighted the capacity of Nigeria’s domestic investment market.
According to Adenrele, Nigeria’s investment pool, particularly pension fund assets, is estimated at N31 trillion right now and continues to expand.
He also pointed to Africa’s infrastructure financing gap, estimated at between $130 billion and $170 billion annually.
Adenrele stressed the importance of de-risking infrastructure projects to attract institutional investors, development finance institutions and commercial banks.
The fund is designed to provide institutional investors with an opportunity to participate in infrastructure projects while addressing some of the risks associated with climate change and infrastructure development.
Climate Risks to African Infrastructure
The fund is also designed to address the growing economic impact of climate change on African infrastructure.
David Johnson, Chief Risk Officer at AFC, said Africa loses an estimated $200bn annually because of climate-related disruptions.
In Nigeria, he noted that flooding damages roads and creates severe traffic delays, while rising temperatures increase the deterioration of transport infrastructure.
Transport costs currently account for nearly 40 per cent of the cost of goods, he added.
Johnson said investments in climate-resilient transport infrastructure could help reduce logistics costs for businesses and consumers while also delivering competitive returns to investors.
Diversified Portfolio to Manage Risks
To manage project execution risks and currency volatility, the fund will maintain a diversified portfolio covering early-stage projects, mid-stage financing and mature operational assets.
This approach is intended to provide exposure across different stages of infrastructure development while helping manage the risks associated with individual projects.
Ayaan Adam, Chief Executive Officer of AFC Capital Partners, described the ICRF Nigeria as a dedicated investment pathway for institutional investors seeking exposure to climate-resilient infrastructure assets.
“By combining institutional capital with AFC’s infrastructure expertise and the catalytic power of blended finance, we can address both the financing needs of critical infrastructure and the growing risks posed by climate change,” Adam said.
Green Climate Fund Provides Support
The Green Climate Fund supports the vehicle by providing first-loss capital and technical assistance aimed at reducing investment risks and attracting additional private-sector financing.
First-loss capital can help absorb a portion of potential losses, reducing risk for other investors and potentially making infrastructure projects more attractive to institutional capital.
The support forms part of the fund’s broader strategy to mobilise additional private investment for climate-resilient infrastructure in Nigeria.
First Investment Expected Before Year-End
AFC Capital Partners expects the Nigerian fund to make its first investment before the end of the year, subject to achieving its first close.
Transport and renewable energy will be prioritised once the fund begins deploying capital.
The launch therefore marks the beginning of the capital-raising phase, with institutional investors expected to play a central role in providing the funding required for future investments.
AFC’s African Infrastructure Experience
AFC Capital Partners is an SEC-licensed asset manager registered in Mauritius and Nigeria.
Its parent organisation, the Africa Finance Corporation, was established in 2007 and has deployed more than $20bn across 36 African countries.
The new Nigerian fund builds on this infrastructure investment experience while creating a dedicated vehicle for climate-resilient projects.
By combining institutional capital, AFC’s infrastructure expertise and Green Climate Fund support, the initiative aims to increase financing for infrastructure that can withstand climate-related disruptions while supporting Nigeria’s transition toward greener development.
Outlook
The launch of the $150 million Infrastructure Climate-Resilient Fund gives Nigerian institutional investors a dedicated vehicle for investing in climate-resilient infrastructure. With transport and renewable energy identified as initial priorities, the fund is expected to focus on projects that can address infrastructure gaps while responding to climate risks.
The first investment is expected before the end of 2026, following the fund’s first close and capital mobilisation from institutional investors.
FAQs
1. What is the size of AFC’s new climate-resilient fund in Nigeria?
AFC Capital Partners has launched a $150 million Infrastructure Climate-Resilient Fund in Nigeria.
2. Which sectors will the fund prioritise?
The fund will prioritise transport and renewable energy projects after achieving its first close.
3. Who will the fund target as investors?
The fund will target pension fund administrators, insurance firms and sovereign wealth funds, among other institutional investors.
4. When is the fund expected to make its first investment?
AFC Capital Partners expects the fund to make its first investment before the end of 2026, following its first close.
Sources: Punch Newspapers, Business News Nigeria, MSME Africa
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