The fund, managed by African Infrastructure Investment Managers (AIIM), is targeting a total capital raise of $200 million to finance early-stage climate infrastructure projects across the continent.

The initiative brings together international development finance institutions and private investors to address the funding gap that has slowed the rollout of clean energy and low-carbon infrastructure in Africa.

Alongside FSDAi and ACP, the International Finance Corporation’s Frontier Opportunities Fund is also participating, while additional senior equity co-investors include the IFC, KfW, Proparco, and several private investors.

ATAF is structured to channel capital into projects and companies in the early stages of development. In many African markets, infrastructure funds typically focus on projects that are already well advanced and considered low risk.

This leaves early-stage initiatives struggling to attract financing, even when they have strong commercial potential. The new fund aims to address this gap by providing capital when it is most difficult to secure.

Anne-Marie Chidzero, Chief Investment Officer at FSDAi, said the transition to cleaner energy systems across Africa requires investors willing to take early risks.

She noted that waiting for projects to become fully bankable before investing will not deliver the scale of financing needed.

According to Chidzero, FSDAi’s partnership with ACP and their joint anchor investment in ATAF reflects a willingness to step in at the early stages and help unlock broader financing for the sector.

The fund was established following a detailed market review that identified a financing gap for companies and project developers working on climate-related infrastructure.

ATAF intends to back economically viable platforms that are still building their projects or scaling their businesses, helping them reach the stage where larger institutional investors can participate.

Investments will focus on three main areas central to Africa’s energy transition.

The first is “clean electrons,” which includes grid-connected and off-grid renewable energy systems, energy efficiency projects, and electricity transmission infrastructure.

The second is sustainable transport, covering technologies such as electric vehicles and low-carbon mobility solutions.

The third area focuses on “clean molecules,” including green fuels such as ammonia, sustainable fertilisers, and biofuels.

ATAF is part of a broader effort by development finance institutions and private investors to mobilise additional capital for Africa’s climate transition.

Despite the continent’s growing energy needs and strong potential for renewable resources, private equity flows to Africa remain relatively small compared with other emerging markets, underscoring the need for catalytic investment funds to attract additional capital.

Through their anchor commitment, FSDAi and ACP aim to demonstrate the commercial viability of early-stage climate investments and encourage more investors to participate in financing Africa’s shift toward cleaner energy and sustainable infrastructure.