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The Africa Finance Corporation (AFC), through its asset management subsidiary AFC Capital Partners (ACP), has launched the Infrastructure Climate-Resilient Fund Nigeria (ICRF Nigeria), a new vehicle designed to channel domestic institutional savings into infrastructure projects across Nigeria and the wider African market.
Registered with the Securities and Exchange Commission (SEC) as a closed-end fund, ICRF Nigeria is structured to provide pension fund administrators, insurers, asset managers and other Nigerian institutional investors with access to a diversified portfolio of commercially viable infrastructure opportunities.
Fund Targets Domestic Institutional Capital
The Nigerian vehicle forms part of AFC Capital Partners’ broader $750 million Infrastructure Climate-Resilient Fund (ICRF), which seeks to strengthen the ability of African infrastructure to withstand increasingly severe climate-related risks.
The fund incorporates climate resilience throughout the infrastructure lifecycle, covering planning and design through construction and eventual operations.
The initiative comes as African economies face a combination of infrastructure financing shortages and growing exposure to extreme weather and other climate impacts.
For Nigeria, the fund provides a mechanism for redirecting a portion of the country’s long-term institutional savings towards productive assets while giving investors exposure to infrastructure projects beyond traditional financial instruments.
AFC Points to $4tn Domestic Resource Pool
AFC President and Chief Executive Officer Samaila Zubairu said Africa has substantial financial resources that could be deployed more effectively toward long-term economic development.
According to Zubairu, the continent holds more than $4 trillion in domestic resources, including significant pools of capital managed by pension funds, insurers and sovereign wealth funds.
However, a considerable portion of these resources remains invested in low-risk and short-term instruments rather than being channelled into infrastructure, industry and innovation.
He said the opportunity is to create investment vehicles capable of connecting Africa’s long-term savings with its long-term development requirements.
Climate Resilience at the Core
Unlike a conventional infrastructure fund focused primarily on financial returns, ICRF is designed to incorporate climate resilience into projects from the outset.
This means climate-related risks are considered during project planning, design, construction and operation rather than treated as an issue to address after infrastructure has been completed.
AFC has described the approach as an attempt to ensure that infrastructure supporting Africa’s economic expansion can remain functional amid increasingly unpredictable climate conditions.
The fund is also structured around blended finance, combining different forms of capital to help reduce risks that have historically discouraged private investment in climate adaptation infrastructure.
Global Investors Back Wider Fund
The wider $750 million ICRF has attracted commitments from several international and African institutional investors.
These include the Green Climate Fund (GCF), European Investment Bank (EIB), Development Bank of Southern Africa (DBSA), Cassa Depositi e Prestiti (CDP), Nigeria Sovereign Investment Authority (NSIA) and African pension funds.
The GCF has committed $253 million on a first-loss basis, described by AFC as its largest equity investment in Africa to date.
The first-loss structure is intended to absorb part of the investment risk and help attract additional commercial and institutional capital into infrastructure projects.
Fund Could Mobilise Up to $3.7bn
ACP expects the wider ICRF to mobilise as much as $3.7 billion in total financing and develop a diversified portfolio of between 10 and 12 infrastructure projects across Africa.
The strategy is therefore designed to extend beyond the initial capital committed to the fund by using institutional and blended finance to attract additional investment.
For Nigeria, the dedicated fund creates a direct route through which domestic institutional investors can participate in infrastructure development while gaining exposure to projects across the continent.
ACP Sees Opportunity for Nigerian Savings
Ayaan Adam, CEO of AFC Capital Partners, said ICRF Nigeria would give Nigerian institutional investors access to infrastructure opportunities while combining their capital with AFC’s project-development and investment expertise.
She said the structure could allow Nigeria’s long-term savings to contribute to infrastructure development while providing investors with a diversified portfolio spanning Nigeria and other African markets.
The Bigger Picture
The launch highlights the growing effort to mobilise Africa’s own financial resources to finance the continent’s infrastructure needs rather than relying predominantly on foreign capital.
For Nigeria, where pension and institutional funds represent a substantial pool of long-term savings, unlocking more of that capital for infrastructure could provide an additional source of financing for projects critical to economic growth.
The immediate challenge will be converting institutional interest into actual project investments and ensuring that climate resilience, commercial viability and investor returns are achieved together.
If successful, ICRF Nigeria could provide a model for connecting domestic savings with infrastructure development while helping Nigeria and other African economies build assets better equipped to withstand the effects of climate change.
