ARM-Harith Raises $76m, Tests New Model For African Infrastructure Finance

By Olumide Johnson

ARM-Harith Infrastructure Investments Limited has secured approximately $76 million in the first close of its climate transition successor fund, a vehicle targeting a final raise of $200 million to finance infrastructure projects across Sub-Saharan Africa. Announced recentlyy, the fund is structured as Africa’s first integrated multi-currency blended finance platform for infrastructure equity investments, allowing investors to commit capital in both United States dollars and local currencies. The first close was anchored by $20 million in catalytic capital from FSD Africa Investments and the African Development Bank’s Sustainable Energy Fund for Africa. The fund is designed to address currency mismatches that have historically constrained infrastructure financing across African markets.

DECISION HIGHLIGHT

The significance of the fund lies less in its size than in its structure.

By combining local-currency and hard-currency capital within a single investment vehicle, ARM-Harith is attempting to solve one of Africa’s most persistent infrastructure financing challenges: the disconnect between foreign-currency investment capital and infrastructure assets that generate revenues largely in local currencies.

The model is specifically designed to attract domestic institutional investors, particularly pension funds.

DECISION MEMO

The first close highlights an important shift in African infrastructure finance.

Historically, infrastructure projects across the continent have depended heavily on foreign-currency financing. While such funding has supported project development, it has also exposed assets to exchange-rate volatility whenever revenues are earned in local currencies but obligations are denominated in dollars or euros. ARM-Harith’s successor fund seeks to reduce that mismatch.

Rachel More-Oshodi, Chief Executive Officer of ARM-Harith, said that the structure builds on lessons from the firm’s earlier infrastructure fund.

“With this successor fund, we are building on that foundation by bringing local and hard-currency capital together within a single platform, better aligning the structure of the capital with the realities of African infrastructure assets,” More-Oshodi said.

The approach reflects a broader industry trend towards mobilising domestic savings to support long-term infrastructure development. Pension funds represent a particularly attractive source of capital because their long-term liabilities align naturally with infrastructure investment horizons.

Anne-Marie Chidzero, Chief Investment Officer of FSD Africa Investments, argued that the principal obstacle has not been capital scarcity but investment design.

“The constraint has never been capital itself, but the absence of investment products structured to meet pension funds’ liability-matching needs, particularly around tenure, risk allocation and currency alignment,” Chidzero said.

The participation of the African Development Bank and FSD Africa Investments also underscores the growing role of blended finance structures in attracting private capital into sectors often perceived as too risky.

Joao Duarte Cunha, Manager of the African Development Bank’s Renewable Energy Funds Division, described the first close as “a major milestone for renewable energy investment in sub-Saharan Africa.”

Viewed strategically, the fund represents an attempt to shift African infrastructure financing away from dependence on external capital alone and towards a more balanced model incorporating domestic institutional investors.

DATA BOX

• First close achieved: $76 million
• Target final close: $200 million
• Catalytic capital committed: $20 million
• Anchor institutions: FSD Africa Investments and African Development Bank Sustainable Energy Fund for Africa
• Fund structure: Integrated multi-currency blended finance vehicle
• Geographic focus: Sub-Saharan Africa
• Investment focus: Climate-resilient infrastructure and energy transition projects
• Predecessor fund power capacity financed: More than 700 megawatts
• Jobs supported by predecessor fund: Approximately 22,500
• Annual carbon dioxide emissions avoided: Approximately 2.6 million tonnes

WHO WINS / WHO LOSES

Winners

• Pension funds seeking infrastructure exposure aligned with local-currency liabilities.
• Infrastructure developers requiring long-term capital.
• Renewable energy and climate-resilience projects.
• Domestic capital markets across African economies.
• Communities benefiting from improved infrastructure services.

Losers

• Financing models heavily exposed to currency mismatches.
• Infrastructure projects dependent solely on foreign-currency funding.
• Investors unable to adapt to evolving blended-finance structures.

POLICY SIGNALS

The fund reinforces growing policy emphasis on mobilising domestic institutional capital for development financing.

It also reflects increasing recognition that currency risk remains a major impediment to infrastructure investment across Africa.

The structure aligns with broader efforts by development finance institutions to crowd private capital into strategic sectors through risk-sharing mechanisms.

INVESTOR SIGNAL

The strongest signal is the emergence of more sophisticated infrastructure financing models tailored to African market realities.

The participation of major development finance institutions suggests confidence in blended-finance approaches capable of attracting both local and international investors.

For institutional investors, the fund demonstrates growing opportunities to participate in infrastructure equity without assuming the full extent of traditional currency-mismatch risks.

RISK RADAR

The principal risk remains execution.

Raising capital is only the first stage; the fund’s long-term success will depend on identifying bankable projects capable of generating stable returns and measurable development outcomes.

A second risk involves currency volatility. While the structure seeks to mitigate exchange-rate exposure, macroeconomic instability across some markets could still affect project performance.

A third risk concerns infrastructure delivery. Regulatory uncertainty, project delays and operational inefficiencies remain recurring challenges across the continent.

Nonetheless, the first close suggests that African infrastructure finance is gradually evolving beyond conventional funding models towards structures designed to align capital more closely with the realities of local markets and long-term development needs.