The African Development Bank (AFDB), together with the Sustainable Energy fund for Africa (SEFA), have approved a combined-equity investment of $20 million in the AfricaGoGreen Fund (AGGF) towards financing energy-efficient technologies and business models to accelerate the continent’s energy transition.
This new investment adds to a previous equity contribution of $11.5 million approved by the Nordic Development Fund (NDF) in December 2021. This also falls in line with NDF’s mandate to provide financing to climate change mitigation and adaptations activities.
NDF doubles as a donor to SEFA, thus, reinforcing the close partnership to advance the transition to cleaner and greener solutions for the continent while encouraging private sector participation.
Dr. Kevin Kariuki, AfDB Vice President for Power, Energy, Climate and Green Growth said: “This combined Bank investment will lead to increased financing of emerging projects and businesses in the areas of industrial appliances, electric mobility and green buildings, which are key to the decarbonization of African economies and to a just energy transition.”
Mr. Henrik Franklin, Director for Portfolio Origination and Management at the Nordic Development Fund, said: “Achieving the climate goals and universal access to clean and affordable energy will require vast investment in energy efficiency and, more broadly, in electrification and other sector coupling trends.”
He added that by targeting these emerging sectors, AfricaGoGreen Fund complements NDF’s climate and energy access portfolio, and is aligned with the Fund’s strategic role as an early-stage catalytic investor.
AfricaGoGreen Fund to Raise More Investments in Coming Months
Launched in early 2021 with EUR 45 million in catalytic capital, the AfricaGoGreen Fund is a flagship project under the G20 Compact with Africa. The Fund anticipates growing to EUR150 million in the coming months, and will focus in particular on Compact with countries in West Africa.
Jan Martin Witte, Director Global Equity and Funds for KfW Development Bank said: “We are really happy to see the Bank, SEFA and NDF as new investors in AGGF. These new investments are also expected to trigger additional investments by commercial investors and financiers either directly or through co-funding of projects.”
The Fund approved its first deal in August 2021, a loan to AktivCo- a company that finances clean energy solutions for powering telecommunication towers located in Burkina Faso, Cameroon, Chad, Côte d’Ivoire, and Niger.
Furthermore, in December 2021, the Fund made an additional approval of a $5.5 million loan to BBOXX, a technology company exploring energy solutions that would provide electricity and other utilities to the millions without them, for the expansion of access to clean cooking solutions.
Clemens Calice, Co-CEO and founding partner of Lion’s Head Global Partners said: “We are excited to welcome the African Development Bank, SEFA and NDF as investors to the AfricaGoGreen Fund. The Fund will take efforts to transition to a lower-carbon economy a step further by offering financing to innovative African companies that embrace energy efficiency as a challenge and an opportunity.”
The AfricaGoGreenFund provides flexible and tailored debt instruments to private businesses in green appliances for domestic and industrial processes, green buildings, e-mobility solutions, and battery energy storage projects. It is managed by LHGP Asset Management, part of the Lion’s Head Global Partners group.
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