FSD Africa Investments and Allied Climate Partners have announced a combined anchor commitment of $50 million to the first close of the African Transition Acceleration Fund, a new investment vehicle aimed at accelerating Africa’s energy transition.

“Africa’s energy transition will not be financed by waiting for projects to become safe enough for conventional capital,” said Anne-Marie Chidzero, Chief Investment Officer at FSD Africa Investments. “Someone has to go first. This partnership with ACP – and our anchor commitment to ATAF – is us going first.”

The fund, managed by African Infrastructure Investment Managers, is targeting $200 million and is designed to support early-stage climate infrastructure projects across the continent. The International Finance Corporation’s Frontier Opportunities Fund has also joined the first close, alongside senior equity co-investors including the International Finance Corporation, KfW, Proparco and other private investors.

The African Transition Acceleration Fund aims to address a major financing gap in Africa’s infrastructure market. Many infrastructure funds are not structured to deploy capital during the earliest phases of project development, leaving promising initiatives unable to reach bankability or scale.

ATAF was created following a structured market assessment to focus on this gap by supporting economically viable platforms and companies during the most critical stages of development and growth.

By anchoring the fund with catalytic capital, FSD Africa Investments and Allied Climate Partners aim to help unlock further investment into climate infrastructure. The fund will focus on three key areas of the energy transition: clean electrons such as grid and off-grid renewable energy, energy efficiency and transmission; sustainable transport including electric vehicles and low-carbon mobility systems; and clean molecules such as green ammonia, fertilisers and biofuels.

With a pan-African investment strategy, the fund will seek to accelerate projects, strengthen management teams and build platforms capable of attracting commercial capital. The initiative is expected to generate environmental, economic and social benefits including job creation, emissions reductions and expanded access to clean energy and low-carbon transport.

The investment builds on a partnership formed in 2024 between FSD Africa Investments and Allied Climate Partners, which aims to mobilise catalytic capital for climate investments in emerging markets. FSD Africa Investments, backed by the UK’s Foreign Commonwealth and Development Office, provides long-term risk-bearing capital and expertise in African financial market development. Allied Climate Partners deploys philanthropic capital and specialises in structuring climate investment funds to support sustainable development.

“ATAF is a testament to the power of purposeful partnership,” said Ahmed Saeed, Chief Executive Officer of Allied Climate Partners. “Together with FSDAi and others, we will empower ATAF to catalyse new markets and accelerate transformative infrastructure platforms and companies, creating jobs, powering economies and strengthening communities across Africa.”

The fund will be managed by African Infrastructure Investment Managers, which has more than two decades of experience investing in infrastructure sectors including renewable energy, transport and digital infrastructure across the continent. ATAF will be led by Lisa Pinsley, an energy investor with more than 18 years of experience working across African markets.

ATAF represents the first investment under the strategic partnership between FSD Africa Investments and Allied Climate Partners and complements FSDAi’s broader portfolio supporting green growth across Africa. These include investments in InfraCredit Nigeria, the Acre Impact Fund, the Africa Local Currency Bond Fund and the Africa Climate Transformation Fund.

For Allied Climate Partners, ATAF marks its first catalytic investment in Africa, following earlier climate-focused initiatives in Southeast Asia and the Caribbean.