Africa Finance Corporation (AFC) has launched the Infrastructure Climate-Resilient Fund Nigeria (ICRF Nigeria) to mobilise domestic institutional capital for climate-resilient infrastructure projects.
The fund, launched in Lagos on Monday through AFC’s asset management subsidiary, AFC Capital Partners, is aimed at pension funds, insurance companies, asset managers and other institutional investors in Nigeria.
The initiative forms part of AFC Capital Partners’ broader $750 million Infrastructure Climate-Resilient Fund, which is designed to invest in infrastructure projects across Africa while incorporating climate resilience into their planning, construction and operation.
According to AFC, the Nigerian fund provides a structured channel for domestic institutional investors to participate in infrastructure investments while helping direct more of Africa’s long-term savings towards development projects.
Samaila Zubairu, President and Chief Executive Officer of AFC, said Africa has more than $4 trillion in domestic resources, including pension, insurance and sovereign wealth funds, but needs to better connect those resources with the continent’s infrastructure requirements.
The broader fund has received commitments from institutional investors including the European Investment Bank, Development Bank of Southern Africa, Cassa Depositi e Prestiti and the Nigeria Sovereign Investment Authority.
The Green Climate Fund has also committed $253 million in first-loss capital to the broader initiative, which AFC says is intended to help reduce investment risks and attract additional private capital.
AFC Capital Partners expects the fund to mobilise up to $3.7 billion in total financing and support between 10 and 12 infrastructure projects across Africa.
For Nigeria, the launch comes as the country continues to seek new sources of long-term financing for infrastructure while institutional investors face pressure to find suitable assets for deploying long-term capital.
The immediate test for ICRF Nigeria will be how successfully it attracts domestic commitments and converts that capital into bankable infrastructure projects. Its impact will ultimately depend on the projects financed and the economic and climate resilience benefits they deliver.
