FSD Africa Commits GBP 10 M In ARM-Harith To Tap Nigeria’s Pension Power For Climate Equity

FSD Africa Investments (FSDAi), a UK-backed specialist development finance investor, has announced a GBP 10 M (USD 13.2 M) commitment into Lagos-based private equity firm ARM-Harith Infrastructure Investment Limited to unlock local institutional capital—specifically local pension funds—for climate infrastructure development.

The investment, directed into ARM-Harith’s Climate and Transition Infrastructure Fund (ACT Fund), isn’t just another capital injection; it’s a bold attempt to solve a problem that’s kept billions in local pension assets parked on the sidelines.

For years, Nigerian pension funds have been hesitant to enter the infrastructure equity space. The long-term nature of these investments, combined with limited early returns and heightened risk, has made them difficult to justify.

FSDAi is stepping in with an approach tailored to break that stalemate. Their facility introduces a mechanism that offers early, predictable payouts, giving pension funds the kind of short-term liquidity they need to participate up front without compromising on long-term growth.

On top of that, 75% of FSDAi’s commitment will be in local currency. This first-of-its-kind approach is specifically designed to mitigate the impact of foreign exchange volatility for pension funds, which has long discouraged domestic investment in infrastructure. This structure is expected to catalyse an additional GBP 31 M (USD 41 M) from Nigerian pension funds—five times the capital raised in ARM-Harith’s previous fund.

Beyond the financial support, the fund’s focus is squarely on climate-resilient infrastructure. That includes sustainable energy, transport, water systems, and digital connectivity—sectors critical to Nigeria’s future and aligned with at least four UN Sustainable Development Goals. The initiative is also projected to create or support around 3,000 green jobs, adding real-world impact to its financial ambition.

FSDAi’s investment aligns with its broader mission to deepen African financial markets and accelerate the financing of Africa’s green economic transformation.

The UK government is backing the effort through its wider agenda to strengthen local capital markets in Africa.

British Deputy High Commissioner in Lagos, Jonny Baxter, described local currency financing as a practical way to “mitigate the impact of foreign exchange volatility, narrow the financing gap, support diversification into new asset classes and into climate-related projects and social sectors—while providing long-term funds to growing businesses.”

FSDAi’s Chief Investment Officer, Anne-Marie Chidzero, called the collaboration a clear example of how risk-bearing capital can be structured to unlock domestic investment. She noted that “this approach strengthens Africa’s financial markets and facilitates capital allocation towards sustainable, green economic growth across the continent.”

For ARM-Harith CEO Rachel Moré-Oshodi, the deal marks a turning point. “For too long, domestic pension funds have remained on the sidelines of infrastructure equity due to liquidity constraints and heightened perception of risk. We are proud to have collaborated with FSDAi to design a pioneering solution that reduces risk for pension funds while delivering both early liquidity and long-term capital growth. This is a global first—a groundbreaking private sector-led solution that could fundamentally change how infrastructure equity is financed—not just in Nigeria, but across Africa.”

With local capital now positioned to play a much bigger role in funding sustainable infrastructure, this partnership may be the start of a larger shift—where domestic institutions are no longer on the sidelines but at the heart of Africa’s development story.