INSTRUMENT ANALYSIS

The ACT Fund is a mid-market greenfield infrastructure fund designed to overcome investment barriers in West Africa by combining technical assistance, equity, and subordinated debt. It utilizes a 'blended currency mechanism' to reduce financing friction during early project stages and provides structured exit solutions for international equity by refinancing projects with local-currency senior debt once they are operational. The fund targets an initial capitalization of USD 150 million for equity and USD 100 million for subordinated debt, with a primary focus on renewable energy before expanding into urban mobility, water, and waste systems.

• The ACT Fund employs a 'blended currency mechanism' (BCM) that operates in two stages: first, drawing from USD equity and local currency funds in tandem to reach the operational phase, and second, using local senior debt to release the majority of invested equity once a project is operational.
• The fund addresses traditional investment barriers such as the low risk appetite of local investors by taking projects to the operational stage before seeking traditional institutional financing, and mitigates FX risks by compressing the timeline for hard-currency equity exits.
• To overcome climate-specific barriers, the fund includes a technical assistance (TA) component to improve project bankability, support climate reporting for developers, and strengthen the fund manager's internal measurement, reporting, and verification (MRV) processes.
• Quantitative modeling suggests the ACT Fund's equity recycling mechanism allows it to build double the amount of projects and mobilize an additional USD 159 million in local funding compared to traditional infrastructure fund models.
• The fund's mobilization potential is estimated at USD 6.25 billion worldwide over a 10-year period if replicated by approximately three infrastructure fund managers in 10 developing economies.
• The fund's immediate financial targets include securing USD 150 million to capitalize the equity fund and USD 100 million for the subordinate debt fund, with a planned capital deployment start date of January 2023.

APA

Climate Policy Initiative (2021). INSTRUMENT ANALYSIS. https://www.climatepolicyinitiative.org/wp-content/uploads/2021/10/ACT-Fund_Instrument-Analysis.pdf

Chicago

Climate Policy Initiative. INSTRUMENT ANALYSIS. 2021. https://www.climatepolicyinitiative.org/wp-content/uploads/2021/10/ACT-Fund_Instrument-Analysis.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=INSTRUMENT ANALYSIS |date=September 2021 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2021/10/ACT-Fund_Instrument-Analysis.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2021instrument, author = {{Climate Policy Initiative}}, title = {{INSTRUMENT ANALYSIS}}, institution = {Climate Policy Initiative}, year = {2021}, month = sep, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2021/10/ACT-Fund_Instrument-Analysis.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }