The Board of Directors of the African Development Bank (“AfDB”), on Wednesday 30th October, approved a USD 20 million equity investment in the ARM-Harith Infrastructure Fund (“ARMHIF”), a new indigenously-managed specialist private equity Infrastructure Fund set up by Asset & Resource Management Company Ltd (“ARM”) in partnership with Harith General Partners Pty (“Harith”) of South Africa, and its specialist team of fund management professionals.
AfDB’s mission is to help reduce poverty, improve living conditions for Africans, and mobilize resources for the continent’s economic and social development. The Bank provides a range of financial products for the private sector to complement its traditional lending operations to governments, and its Private Sector Group promotes strong social and corporate governance standards as well as helps African companies achieve international best practices, making them more competitive domestically and in the international market place.
ARMHIF is a USD 250 million closed-ended Fund set up for investors with an affinity for infrastructure investment to derive long-term stable, predictable, and relatively low-risk returns associated with economic infrastructure. Through the Fund, investors will be able to gain exposure to a wide variety of infrastructure assets across various sectors (transport, energy, and utilities) in West Africa, and primarily in Nigeria. The Fund is managed by an experienced, multi-disciplinary fund management team based in Lagos, Nigeria, and which has more than 60 years combined infrastructure experience in Sub-Saharan Africa and other parts of the world.
ARMHIF’s sponsor, ARM, has already committed USD 25 million of equity to the Fund. ARM, with one of the highest Augusto & Co credit ratings in the country (AA-), is a leading Nigerian non-bank financial services company established in 1994, and which today manages assets in excess of USD 2.7 billion. ARM’s primary interests lie in traditional asset management and fund management, and the group directly and indirectly manages four specialist funds focused on hospitality and retail, real estate, general private equity, and now infrastructure. ARM also has a long history and track record in infrastructure, including being the founding shareholder and sponsor of Lekki Concession Company Ltd, the concessionaire responsible for Nigeria’s first-ever PPP Toll Road Concession.
Harith, who is also bringing USD 25 million of equity commitments to the Fund, already manages the USD 630 million Pan African Infrastructure Development Fund (“PAIDF”), and has a solid track record and history in infrastructure with investments in several sectors across Africa covering ICT, airports, tolled bridges, off-shore oil rigs, and submarine cables, amongst others. Examples of PAIDF’s infrastructure investments include the Main One Cable Company, owner of Nigeria’s first privately-financed submarine cable system, which runs down the coast of West Africa. PAIDF is also an investor in the Henri Konan Bédié Toll Bridge Concession in Abidjan, Cote D’Ivoire, which is currently in the construction phase. Harith is in the process of raising its second Infrastructure Fund, PAIDF 2, with a target fund size of USD 1.2 billion.
Mouhamadou Niang, Acting Director of the AfDB’s Private Sector Group said “the Bank’s support to ARMHIF will contribute toward the delivery of modern and reliable infrastructure that will reduce the cost of doing business and enhance the region’s competitiveness”.
“We are very pleased to have an institution of the calibre of the AfDB as an anchor investor in our new Fund. AfDB has been instrumental in attracting the interest of other investors, including Nigerian Pension Funds, a sector that has a significant role to play in providing long term capital for funding infrastructure development in Nigeria and beyond. We see tremendous infrastructure investment opportunities throughout West Africa. Having the equity capital to deploy is an important part of the equation, as is the support of strong and credible sponsors and partners like ARM and Harith, and an experienced and skilled team”, says Opuiyo Oforiokuma, Managing Director, ARM Infrastructure.
“We are happy that the AfDB has chosen to support this platform as one of the initial investors. Our partnership with ARM is critical as it serves as part of our growth strategy and assisting us to further deepen our dynamic pipeline of projects in West Africa. The platform gives the Nigerian pension industry an opportunity to participate in infrastructure investment in West Africa and derive good returns while doing good for the citizenry. Harith is proud to be associated with the highly experienced and knowledgeable team and leadership from ARM and believes that the synergies brought about by the partnership will unlock inherent value within the West African region,” says Tshepo Mahloele, CEO Harith General Partners.
