Nigeria's ARM and South Africa's Harith announce first close of $250M infrastructure private equity fund

Tshepo Mahloele, CEO of Harith General Partners

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

ARMHIF is a pioneering $250 million closed-ended specialist private equity infrastructure fund. The fund is structured in line with international best practices and its core investment focus is on Transportation, Energy, and Utilities in West Africa, and primarily Nigeria.

The fund’s management team comprises of multidisciplinary professionals with over 70 years of 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 currently stand at around $91 million. ARM, the lead sponsor and main investor in ARMHIF, committed $25 million to the fund. Harith, the fund’s 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.

Nigerian Pension Funds’ investment in ARMHIF is the first infrastructure investment made by Nigerian Pension Funds via the private equity route.

ARMHIF 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 and CEO of ARM-HARITH Infrastructure Investment Ltd (ARMHIIL).

Tshepo Mahloele, CEO of Harith General Partners, said that he is 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,” Mahloele added.

Source: Nigeria: Arm-Harith Infrastructure Investment Fund Hits U.S$250 Million.