The African Renewable Energy Fund, a dedicated renewable energy fund focused on sub-Saharan Africa, has reached its final close with US$200 million of committed capital to support small- to medium-scale projects, with investment at the final close from European Investment Bank and the Global Energy Efficiency and Renewable Energy Fund, among other investors.
The African Development Bank and its Sustainable Energy Fund for Africa are the fund’s lead sponsors, with equity investment of US$25 million and US$25.5 million, respectively, alongside US$4.5 million from the Global Environment Facility. SEFA has additionally committed a US$10-million Project Support Facility to be deployed at an early stage to structure bankable deals
The fund, which is headquartered in Nairobi, held its first close of US$100 million in March 2014 and since that time has been investing capital in grid-connected development stage renewable energy projects, including small hydro, wind, geothermal, solar and biomass projects. AREF is the first dedicated sub-Saharan African renewable energy fund and is managed by Berkeley Energy, a fund manager focused on developing and investing in renewable energy projects in emerging markets.
The final investor group also includes West African Development Bank , ECOWAS Bank for Investment and Development , The Netherland Development Finance Co., Calvert Investments, the UK’s Development Finance Institution called CDC Group, the Belgian Investment Co. for Developing Countries, OeEB – the Development Bank of Austria, Wallace Global Fund, Sonen Capital, Berkeley Energy, African Biofuel and Renewable Energy Co., and a number of other private investors.
AfDB had originally selected Berkeley Energy as the fund manager for AREF following a global competitive procedure and with the fund having reached its hard cap as well as successfully closing a number of transactions in its initial period, Berkeley Energy has justified the AfDB’s selection.
“We are very pleased to have reached our target fund raising and look forward to continuing our work focusing on the technical delivery of our projects with our project partners from concept to generating reality,” said Berkeley Energy’s Partner and Co-Founder, Alastair Vere Nicoll.
“AfDB is pleased to see that AREF is now fully capitalised to deliver on its pan-African mandate. We are also equally excited that SEFA and Global Environment Facility participation have been catalytic in mobilizing significant amounts of commercial capital into AREF over a short time-frame; this is key for accelerating deployment of modern, clean and affordable energy in the continent,” said Alex Rugamba, Director of AfDB’s Energy, Environment and Climate Change Department.
