ARM-Harith Infrastructure Investments has secured a $76 million first close for its Climate Transition Fund, a multi-currency blended finance vehicle targeting $200 million at final close. The fund is designed to draw African pension funds and other institutional investors into infrastructure equity, with a focus on energy transition and climate-resilient assets across Sub-Saharan Africa.
The move comes as Africa faces a deep development finance gap, while pension funds and collective investment schemes hold large pools of long-term savings that remain heavily concentrated in government securities. ARM-Harith’s structure seeks to solve one of the biggest barriers to infrastructure investing: the mismatch between dollar-denominated funds and local-currency project revenues.
Key Overview
ARM-Harith announced a $76 million first close for its Climate Transition Fund.
The fund is targeting $200 million at final close.
It combines US dollar and local-currency investments within one structure.
The first close includes $20 million in catalytic capital from FSD Africa Investments and AfDB’s Sustainable Energy Fund for Africa.
The fund will back energy transition and climate-resilient infrastructure across Sub-Saharan Africa.
Africa’s pension funds and collective investment schemes hold over $600 billion, but much remains conservatively allocated.
A Fund Built Around Africa’s Currency Problem
ARM-Harith’s new Climate Transition Fund is designed to address a long-running challenge in African infrastructure finance. Many funds are denominated in hard currency, while roads, power assets, ports, fibre networks and distributed energy projects often earn revenue in local currencies. That mismatch can expose investors to foreign exchange losses and reduce the appeal for domestic pension funds.
By combining dollar and local-currency capital in a single vehicle, ARM-Harith says the fund can give local institutional investors terms that better match their balance sheets, while still preserving hard-currency exposure for international backers. The company said the structure is meant to de-risk pension fund participation and widen the pool of capital available for infrastructure equity.
The first close was anchored by catalytic capital from FSD Africa Investments and AfDB’s Sustainable Energy Fund for Africa. FSD Africa Investments had earlier announced a GBP 10 million commitment to the fund, with most of that facility provided in local currency to reduce foreign exchange volatility for pension investors.
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Pension Capital Becomes the Bigger Prize
The fund is part of a wider push to mobilise African savings for African infrastructure. New industry data shows that Africa’s pension funds and collective investment schemes now hold over $600 billion in assets, including large pools in South Africa, Nigeria and Kenya. However, much of that money remains concentrated in government securities rather than infrastructure, housing, private credit or SMEs.
That allocation pattern matters because infrastructure projects need long-term capital with patient investment horizons. Pension funds are naturally suited to that role, but many have been held back by currency risk, regulatory limits, lack of investable projects and fund structures that do not fit their liability profiles.
The need is becoming more urgent. African leaders and financiers have been pushing for greater use of domestic capital as the continent faces an estimated $400 billion annual financing gap across energy, infrastructure, climate adaptation, food security and job creation.
Why It Matters for Digital and Energy Growth
Although the fund is framed around climate transition, its relevance extends into Africa’s digital economy. Data centres, telecom towers, fibre networks, embedded power systems and logistics infrastructure all need dependable energy and long-term funding. These assets are difficult to finance with short-term capital, making pension-backed infrastructure vehicles increasingly important.
The timing also reflects continued dependence on foreign development finance. Recent private capital research showed that European development finance institutions were the most active investors in African private capital funds during the first quarter of 2026, underlining how much the market still relies on external capital.
ARM-Harith’s predecessor fund financed transport infrastructure and more than 700 MW of installed power capacity, supported about 22,500 jobs and helped avoid an estimated 2.6 million tonnes of carbon emissions annually. The successor fund now seeks to build on that track record by backing commercially viable projects with measurable climate and development impact.
If ARM-Harith succeeds in attracting more pension funds, the Climate Transition Fund could become a practical model for how African capital can finance the energy, transport and digital systems needed for long-term growth.
Sources used: ARM-Harith / FSD Africa / Reuters / Semafor
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