AfDB Approves $10M Investment to Boost Sustainable Infrastructure and Energy Transition in West Africa

The investment, sourced from the Sustainable Energy Fund for Africa (SEFA), aims to unlock $200 million in additional capital from local and international investors.

The Board of Directors of the African Development Bank Group (AfDB) has approved a $10 million concessional equity investment in the ARM-Harith Successor Infrastructure Equity Fund to drive sustainable infrastructure development and energy transition projects in Nigeria and the broader West Africa region.

The investment, sourced from the Sustainable Energy Fund for Africa (SEFA), aims to unlock $200 million in additional capital from local and international investors. SEFA, a multi-donor Special Fund managed by the Bank, provides catalytic financing to promote private sector investments in renewable energy and energy efficiency projects across Africa.

Addressing Infrastructure Financing Gaps

The ARM-Harith Successor Infrastructure Equity Fund, managed by ARM-Harith Infrastructure Investments Limited (ARMHIIL), will focus on filling a critical financing gap in West Africa’s infrastructure sector. The Fund’s innovative structure will raise capital in both US dollars and Nigerian Naira, attracting a diverse investor base, including local pension funds, international financial institutions, and impact investors. This dual-currency structure ensures greater flexibility, reduces risk and enhances financial inclusion for local stakeholders.

The initiative builds on the successful strategy and proven track record of ARMHIIL’s inaugural fund, which also benefited from a catalytic investment by the African Development Bank in 2015. This successor fund will prioritize sustainable infrastructure projects in sectors such as renewable energy, modern transportation, and energy-efficient technologies, with an emphasis on driving innovation and first-of-a-kind developments.

Tangible Environmental and Socioeconomic Benefits

The ARM-Harith Successor Infrastructure Equity Fund is projected to deliver significant environmental, economic, and social impacts, including:

Adding 200 MW of renewable energy capacity.

Reducing 800,000 tons of CO₂ emissions annually.

Creating approximately 10,000 jobs in the region.

Improving access to reliable electricity for 100,000 households.

These outcomes align with the Bank's High Five priorities, particularly Light Up and Power Africa, Industrialize Africa, and Improve the Quality of Life for the People of Africa.

A Collaborative Approach to Sustainable Development

Wale Shonibare, the African Development Bank’s Director for Energy Financial Solutions, emphasized the importance of partnerships in achieving impactful results:

"This investment in the ARM-Harith Successor Infrastructure Equity Fund represents a significant step forward in our collective effort to build sustainable infrastructure across Africa. The partnership with ARM-Harith, coupled with SEFA's catalytic role, demonstrates the power of collaboration in mobilizing private sector investment, including local currency, and achieving lasting positive impact for communities across the continent."

Rachel Moré-Oshodi, ARM-Harith’s Managing Director and CEO, praised the collaboration with AfDB, noting:

"We at ARM-Harith are privileged to partner with the African Development Bank on this strategic initiative. This collaboration sets a new standard for innovation and impactful investing, aligning perfectly with our vision of a thriving and self-sufficient continent. This crucial support mobilizes domestic capital for infrastructure development and exemplifies the significant impact of strategic partnerships in channeling resources toward sustainable development across Africa."

Aligning with Africa’s Development Goals

The African Development Bank’s investment aligns with its broader strategies and initiatives, including:

The New Deal on Energy for Africa: Accelerating universal access to electricity.

The Climate Change and Green Growth Action Plan (2021-2025): Promoting climate resilience and low-carbon growth.

The M300 Initiative (Mission 300): Aiming to bring electricity to 300 million Africans by 2030.

The recently approved Ten-Year Strategy (2024-2033): Prioritizing private sector investments and renewable energy to stimulate sustainable growth.

Next Steps for Implementation

The ARM-Harith Fund is actively mobilizing capital to launch infrastructure projects across the region. AfDB’s investment is expected to catalyze other private sector and institutional investors to participate in the fund, thereby addressing the acute need for long-term equity financing in West Africa.

As the region faces increasing energy demands and the challenges of climate change, this initiative provides a roadmap for sustainable economic growth, improved energy access, and environmental resilience. By leveraging strategic partnerships, innovation, and blended financing, the African Development Bank and ARM-Harith are setting a strong precedent for future infrastructure investments in Africa.

This investment marks a crucial milestone in advancing energy transition and infrastructure development in West Africa, contributing to long-term economic stability and improving the quality of life for millions across the region.