ARM-Harith Infrastructure Investments has successfully completed the first close of its Climate Transition Fund, securing $76 million toward its overall target of $200 million. The fund is designed to finance climate-resilient infrastructure and energy transition projects across sub-Saharan Africa, helping countries strengthen sustainability while addressing growing climate-related challenges.
The initiative reflects increasing efforts to mobilize capital for climate action in Africa, a region that faces significant infrastructure needs but continues to attract only a small portion of global climate finance. By focusing on both climate resilience and clean energy development, the fund seeks to support projects that can contribute to economic growth while reducing environmental risks.
A key feature of the Climate Transition Fund is its emphasis on attracting African institutional investors, including pension funds and other long-term capital providers. Historically, infrastructure investment across the continent has relied heavily on foreign capital, creating challenges related to currency fluctuations and financing structures that do not always align with local market conditions. ARM-Harith aims to address these limitations through an innovative investment model.
The first round of funding includes contributions from major development finance institutions. The African Development Bank, through the Sustainable Energy Fund for Africa, and FSD Africa Investments have provided support that will help finance projects focused on climate adaptation and sustainable infrastructure development. Their participation also signals confidence in the fund’s ability to attract additional investors over time.
One of the fund’s most distinctive characteristics is its blended multi-currency structure. The model combines U.S. dollar financing with local-currency investments, creating a more flexible financing platform. This approach is intended to reduce foreign-exchange risks that often undermine infrastructure projects in African markets, where revenues are typically generated in local currencies while financing is frequently sourced in foreign currencies.
By incorporating local-currency financing, the fund can better align project revenues with debt obligations, reducing financial stress and improving project sustainability. At the same time, international investors can continue to maintain exposure to hard-currency investments, allowing the fund to meet the needs of both domestic and global capital providers.
ARM-Harith views this structure as an important step toward unlocking greater participation from African institutional investors. Pension funds and other domestic investors often seek long-term investment opportunities but have traditionally faced barriers when investing in infrastructure projects exposed to currency volatility. The fund’s design seeks to overcome these challenges and encourage broader participation in sustainable infrastructure financing.
The Climate Transition Fund also aims to address Africa’s significant climate finance gap. Despite being highly vulnerable to climate change impacts, sub-Saharan Africa receives less than three percent of global climate finance flows. This imbalance has limited the region’s ability to invest in renewable energy, climate adaptation, resilient infrastructure, and sustainable development initiatives.
According to ARM-Harith, the fund builds on previous efforts that demonstrated the ability of local institutional investors to support large-scale infrastructure projects. The new platform seeks to combine domestic and international sources of capital within a single investment vehicle, helping distribute risks more effectively and creating financing solutions tailored to African market realities.
Investment priorities are expected to include sectors linked to energy transition, climate resilience, and sustainable infrastructure development. These areas are increasingly important as African countries seek to expand access to reliable energy, strengthen climate adaptation measures, and support economic development while reducing environmental impacts.
