The African Development Bank (AfDB) is accelerating climate technology innovation across Sub-Saharan Africa with a significant $10 million investment through its Sustainable Energy Fund for Africa (SEFA).
This funding, directed toward the Persistent Africa Climate Venture Builder Fund (ACV Fund), is designed to catalyze the growth of early-stage climate tech ventures while unlocking an additional $70 million in private capital.
The ACV Fund focuses on addressing the pressing financing needs of early-stage climate technology entrepreneurs. It prioritizes high-potential sectors such as solar energy, energy efficiency, electric mobility, agricultural technology, and circular economy innovations. These industries are critical in Africa’s efforts to combat climate change while driving economic growth.
Special emphasis is placed on supporting African entrepreneurs, particularly women-owned and managed businesses. By doing so, the fund not only contributes to climate resilience but also promotes gender equality and inclusive economic participation.
Mitigating Risks Through Strategic Investment
SEFA’s $10 million commitment employs a blended finance model, combining public and private funds to reduce risks associated with early-stage climate ventures. This approach addresses a chronic equity financing gap that often hampers the growth of promising startups in the climate technology sector.
João Duarte Cunha, Manager of the AfDB’s Renewable Energy Funds Division, emphasized the significance of the initiative, stating:
“Africa is at the forefront of both the climate crisis and the climate opportunity. We are keen to catalyze more risk and venture capital to support promising African technology start-ups developing commercial solutions to complex climate and development issues. We look forward to our partnership with Persistent as one of the more seasoned early-stage investors in the continent, with a strong track record in energy access and clean energy transition.”
The ACV Fund is poised to deliver remarkable outcomes, including: 200 MW of renewable energy capacity added; Expanded energy access for 420,000 households and 31,000 businesses; Reduction of approximately 17 million tons of CO2e emissions; Creation of over 66,000 jobs, with a significant portion benefiting women.
The initiative exemplifies how innovative financial models can simultaneously drive economic development, climate action, and gender equity.
A Venture-Building Model for Success
Persistent, the organization managing the ACV Fund, brings its proven venture-building model to the table. Wairimu Karanja, Partner and Chief Legal Officer at Persistent, highlighted the AfDB’s confidence in their approach:
“This commitment reflects the African Development Bank’s confidence in our climate investing and in-depth Venture Building model in Sub-Saharan Africa. The ACV Fund invests financial and human capital in early-stage companies led by outstanding entrepreneurs and gender-aligned teams that can drive meaningful climate impact while achieving commercial scalability.”
By combining financial and human capital investments, Persistent ensures that early-stage ventures have the resources and expertise needed to achieve commercial scalability while delivering significant climate impact.
The Sustainable Energy Fund for Africa (SEFA) is a multi-donor special fund dedicated to unlocking private sector investments in renewable energy and energy efficiency across Africa. It provides technical assistance and concessional finance to overcome market barriers, build robust project pipelines, and improve the risk-return profile of investments.
Aligned with Sustainable Development Goal 7 (SDG 7) and the African Development Bank’s Mission 300 initiative, SEFA’s overarching goal is to ensure universal access to affordable, reliable, sustainable, and modern energy for all Africans.
Africa’s climate challenges present an equally significant opportunity to develop innovative solutions that benefit the region and the world. The AfDB’s investment in the ACV Fund underscores its commitment to fostering a sustainable and inclusive future.
With initiatives like these, Sub-Saharan Africa is not only addressing climate vulnerabilities but also positioning itself as a leader in the global clean energy transition.
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