AFC launches $150m climate fund for Nigerian infrastructure

AFC Capital Partners has launched a $150 million Infrastructure Climate-Resilient Fund in Nigeria after obtaining regulatory approval from the Securities and Exchange Commission (SEC). The closed-end vehicle, registered in Lagos, aims to channel domestic institutional capital into green infrastructure projects across the country.

As part of a larger $750 million pan-African climate initiative, the Nigerian platform seeks to attract investments from pension fund administrators, insurance firms and sovereign wealth funds, with the goal of financing $3.7 billion in projects. AFC Capital Partners' CFO, Chika Dotimi-Beke, emphasized the immediate priority of attracting capital and deploying it, with the first investment anticipated before the end of the year.

The Managing Director/CEO of United Capital Plc and financial adviser for the transaction, Gbadebo Adenrele, highlighted Nigeria's growing investment pool, estimated at N31tn to N32tn, and the expansion of domestic savings. Africa's annual infrastructure financing gap is between $130 billion and $170 billion, necessitating de-risking projects to attract investors.

AFC Capital Partners' Chief Risk Officer, David Johnson, noted that Africa suffers an estimated $200 billion in annual losses due to climate disruptions, with Nigeria facing issues like flooding and damaged transport networks. The fund will invest across a balanced portfolio of early-stage, mid-stage and mature operational assets to mitigate risks and currency volatility.

The Green Climate Fund provides first-loss capital and technical assistance to de-risk investments and attract private finance.