AFC Capital Partners (ACP), the asset management arm of the Africa Finance Corporation (AFC), has launched a dedicated Infrastructure Climate-Resilient Fund Nigeria (ICRF Nigeria) to mobilise domestic institutional capital for climate-resilient infrastructure projects across Nigeria and the wider African market.
The fund, registered with the Securities and Exchange Commission (SEC) as a closed-end fund, is designed to give Nigerian pension fund administrators (PFAs), insurers, asset managers and other institutional investors a structured avenue to deploy long-term capital into commercially viable infrastructure projects.
ICRF Nigeria is part of ACP’s $750 million Infrastructure Climate-Resilient Fund (ICRF), which seeks to integrate climate resilience into infrastructure projects from planning and design through construction and operations.
ACP expects the fund to mobilise as much as $3.7 billion in total financing and build a diversified portfolio of between 10 and 12 infrastructure projects across Africa.
Connecting pension capital to infrastructure
Samaila Zubairu, president and chief executive officer of AFC, said Africa has substantial domestic financial resources that could be deployed more effectively towards productive investment.
“Africa is not short of capital. The continent holds more than US$4 trillion in domestic resources, including significant pools of long-term capital in pensions, insurance and sovereign wealth funds,” Zubairu said.
He noted that much of this capital remains invested in low-risk, short-term instruments rather than being channelled into infrastructure, industry and innovation.
“The opportunity before us is to create investment vehicles that connect Africa’s long-term savings with its long-term development needs,” he said.
Zubairu described ICRF Nigeria as an important step towards enabling Nigerian institutional investors to participate in infrastructure development that can support more resilient and sustainable economic growth.
$750m fund targets climate-resilient projects
ICRF has attracted commitments from global and African institutional investors, including the Green Climate Fund (GCF), which has provided a $253 million first-loss commitment, its largest equity investment in Africa to date.
Other participating institutions include the European Investment Bank (EIB), Development Bank of Southern Africa (DBSA), Cassa Depositi e Prestiti (CDP), Nigeria Sovereign Investment Authority (NSIA) and several African pension funds.
The first-loss structure is intended to absorb part of the downside risk associated with infrastructure and climate investments, making projects more attractive to commercial and institutional investors.
Ayaan Adam, CEO of ACP, said the Nigeria platform would provide domestic investors with a dedicated route into infrastructure opportunities while combining institutional capital with AFC’s infrastructure expertise and blended-finance mechanisms.
“ICRF Nigeria gives Nigerian institutional investors a dedicated route into high-quality, climate-resilient infrastructure investments across Nigeria and Africa,” Adam said.
She said the approach could address both infrastructure financing needs and the increasing risks posed by climate change.
Focus on energy, transport and digital infrastructure
The fund will target sectors considered critical to Africa’s economic transformation, including renewable energy, transport and logistics, digital infrastructure and industrial development.
Rather than treating climate resilience as a separate consideration, ICRF incorporates climate risk into the investment process from the outset.
Projects will undergo climate-risk screening and assessment covering physical and transition risks, including exposure to extreme weather events, emissions pathways and climate governance.
The approach is intended to ensure that infrastructure assets remain viable and operational as climate conditions change.
For Nigeria, where infrastructure assets such as roads, power facilities, transport networks and digital systems face exposure to flooding, extreme heat and other climate-related disruptions, incorporating resilience into project design could reduce long-term economic losses and maintenance costs.
Blended finance to crowd in private capital
A central feature of ICRF is the combination of concessional and commercial capital to address financing barriers that have historically limited investment in climate adaptation across Africa.
Through blended finance and targeted de-risking mechanisms, the fund aims to make infrastructure projects that may otherwise struggle to attract financing more investable for private and institutional capital.
The GCF’s first-loss commitment is complemented by technical assistance for climate-risk assessment and monitoring, strengthening the fund’s capacity to identify and manage climate-related risks.
With a target of up to $3.7 billion in total financing, the fund’s proposed leverage demonstrates the role that development finance and first-loss capital can play in unlocking institutional investment for infrastructure.
New avenue for Nigerian long-term savings
The launch of ICRF Nigeria could deepen the connection between Nigeria’s domestic savings pools and infrastructure financing at a time when the country needs substantial investment to close infrastructure gaps and support economic growth.
The platform effectively seeks to turn part of the country’s long-term institutional savings into capital for productive assets while providing investors with access to diversified infrastructure opportunities.
The fund’s success will ultimately depend on its ability to identify commercially viable projects, manage climate and operational risks and generate competitive returns for institutional investors.
But by creating a regulated domestic vehicle and combining Nigerian institutional capital with global development-finance support, ICRF Nigeria represents a potentially significant new channel for financing the infrastructure required for Nigeria’s long-term economic transformation.
