AVA Infrastructure Fund holds power investment pending drawdown conditions

AVA Infrastructure Fund withheld disbursement of an approved power-sector investment because the project sponsor had not satisfactorily met the conditions required to draw the facility, its third-quarter investor report says. The disclosure distinguishes an investment approval from money actually reaching a project.

The report for the period ended September 30, 2026, filed with the Nigerian Exchange does not identify the sponsor or provide the size of the approved facility. It records two active urban and social infrastructure investments with an outstanding balance of N1.70 billion. Their performance is described by the manager as being in line with expectations.

Approval did not remove the drawdown conditions

Investment committees can approve facilities subject to requirements that must be met before release of funds. AVA's disclosure says those requirements had not been satisfactorily fulfilled in this case. It does not say that the investment was cancelled, that the sponsor defaulted on an existing loan or that a construction milestone was missed.

The immediate implication is narrower: the proposed power exposure had not become a disbursed investment at the reporting date. For infrastructure investors, that distinction is important when comparing announced transactions with actual portfolio deployment. An approved pipeline can indicate prospective activity without yet generating the contractual returns associated with a funded project.

[irp]

Most net assets remained outside project loans

The allocation table places 37.6 per cent of net assets in senior project-finance loans and 62.4 per cent in money-market instruments and bank deposits. It shows no allocation to convertible or mezzanine instruments. The fund therefore remained more heavily exposed to liquid financial holdings than to its active infrastructure loans.

Alongside those figures, the table displays allocation ranges of 90–100 per cent for senior project-finance loans and 0–10 per cent for money-market instruments and deposits. The current mix is substantially different from those ranges. The report does not explain an applicable transition period or exemption, so the figures alone are insufficient to conclude that a regulatory breach occurred.

[irp]

Holding liquidity creates a deployment trade-off

The manager's stated long-term return objective is approximately three to five percentage points above the yield on comparable ten-year Federal Government of Nigeria bonds. That is a target, rather than a guaranteed return, a current distribution yield or a statement of performance already achieved during the quarter.

Keeping funds in liquid instruments can preserve flexibility while project conditions remain outstanding. It also means the portfolio's return depends partly on those instruments until capital is deployed. Whether delayed disbursement improves the eventual outcome depends on the risk avoided, the income earned while waiting and the terms of investments ultimately completed. The report does not quantify those alternatives.

[irp]

Net assets increased with the unit count unchanged

The financial summary reports net assets attributable to unitholders of N4.52 billion, compared with N4.34 billion at the end of the second quarter. Units in issue remained at 4,075. Net asset value per unit was approximately N1.109 million, against N1.065 million in the previous quarter.

BusinessPress calculations from the more precise net-asset totals put the quarter-on-quarter increase at about 4.1 per cent. This is a change in reported net assets, not an independently verified market-price return. An investor's realised outcome also depends on acquisition price, distributions and any costs incurred when buying or selling units on the exchange.

[irp]

Telecoms and gas opportunities remain a pipeline

The manager says two additional opportunities, in telecommunications infrastructure and gas distribution, were undergoing credit review and transaction documentation. These are prospective transactions. Neither should be counted as completed exposure, and the report does not establish that they will close on particular dates or at particular investment values.

The fund also said it had made four distributions to date and planned its next payment for October. That statement reflects the position described in the September-period report; it does not independently confirm that the planned October payment has since occurred. A dated payment notice would be needed to establish completion and the amount received by investors.

[irp]

The next meaningful disclosures are whether the power sponsor meets the drawdown conditions, how the large liquid allocation changes and whether either prospective investment reaches completion. Those developments would show capital moving from a reviewed pipeline into funded infrastructure, allowing investors to assess execution alongside the manager's stated return objective.