• Tuesday, June 18, 2024
businessday logo


ARM-Harith Infrastructure Fund achieves first close

ARM-Harith Infrastructure Fund achieves first close

ARM-Harith Infrastructure Investment Limited (ARMHIIL), a joint venture between Asset and Resource Management Company Limited (ARM) and Harith General Partners (Pty) Limited (Harith) of South Africa, has announced first close of the indigenously developed and managed ARM-Harith Infrastructure Fund (ARMHIF).

A pioneering $250 million closed-ended specialist PE Infrastructure Fund, ARMHIF is structured in line with international best practice and core investment focus is on transportation, energy, and utilities in West Africa, and primarily Nigeria.

The Fund management team comprises multi-disciplinary professionals with over 70 years combined experience in development, structuring, financing, and execution of infrastructure projects in sub-Saharan Africa and other parts of the world.

Total commitments to the Fund are currently around $91 million. ARM, the lead sponsor and main investor in ARMHIF, committed $25 million to the Fund. Harith, the co-sponsor, together with investors from its pool, committed a matching $25 million. The African Development Bank (AfDB), playing a key role as catalyst for investment by the limited partners in the Fund, committed $20 million. Nigerian Pension Funds, Chevron CPFA, Progress Trust CPFA, and Total E&P CPFA, also made commitments to the Fund, which we understand are the first infrastructure investments made by Nigerian Pension Funds via the private equity route.

Read also: Between continuity and change in leadership

The Fund also raised commitments from commercial investors, HNIs, and the fund management team.

ARMHIF has already subscribed for an equity stake in its first project investment, the pioneering Azura Edo IPP, a $890 million 450MW gas-fired open cycle power generation plant being developed on the outskirts of Benin City in Edo State, Nigeria. The project is the first of a new wave of project-financed greenfield IPPs being developed in Nigeria. Phase 1 of the plant is targeted to come on stream in 2017, and forecast to create over 1,000 jobs during construction and operation.

“ARMHIF is the first in a series of Infrastructure Funds that we plan to raise over time, providing much needed long-term equity capital for funding infrastructure in Nigeria and West Africa. We see viable investment opportunities in our pipeline, and believe good returns can be generated through our selective and skillful deployment of capital to infrastructure projects. ”ARMHIF is a new and investible infrastructure product for sub-Saharan Africa, and is suitable for local and international investors alike. Having a AAA-rated international organization like the AfDB in our investor group, and Nigerian Pension Funds gaining infrastructure exposure for the first time via our Fund, is a solid start,” said Opuiyo Oforiokuma, managing director/CEO of ARMHIIL.

Tshepo Mahloele, CEO of Harith General Partners, said he was proud to be associated with ARM in its mission to contribute to the broader development of West Africa and Nigeria in particular. “The first close of ARMHIF is a critical milestone that takes us closer to realizing our objective of investing in infrastructure assets and ensuring that our communities have improved access to services. ARMIF’s investments will be long term in nature and investors will be offered stable yet attractive returns within a well-managed low-risk portfolio. Infrastructure investment is a good catalyst for economic stimulus through the delivery of carefully chosen and structured projects with the potential to register positive social impact,” he said.

ARM is a leading indigenously-managed Nigerian financial services firm, with interests in traditional asset management, and alternative asset classes such as real estate and infrastructure through its private funds business. Over the past 10 years in particular, ARM has developed competence in the area of infrastructure finance, development, and investment, a sector with huge potential in Nigeria and throughout the West African Sub-region. ARM has a long history and track record in infrastructure, including as sponsor of Lekki Concession Company Limited, the concessionaire responsible for Nigeria’s first-ever PPP Toll Road Concession.

Harith are fund managers of the South African-based $630M Pan African Infrastructure Development Fund (PAIDF1), and achieved first close in 2014 for a new US$1.2 billion fund (PAIDF2). Harith also owns UK-based Frontier Markets Fund Managers Limited, managers of the Emerging Africa Infrastructure Fund and Guarantco, both funds contributing a further $1.2 billion of assets under management to the Harith portfolio.

Modestus Anaesoronye