A new $200m fund focused on sustainable enterprises across sub-Saharan Africa has attracted significant investment from key European development finance institutions and Japanese shipping conglomerate Mitsui O.S.K. Lines (MOL), signalling growing international appetite for impact-driven opportunities on the continent. The Novastar III Africa People+Planet Fund, managed by UK-headquartered venture capital firm Novastar Ventures, aims to provide crucial equity to early-growth companies operating in sectors such as renewable energy, e-mobility, smart logistics, the circular economy, and regenerative agriculture. The fund’s ambition is to foster both economic growth and environmental sustainability in a region grappling with significant climate challenges.
European development finance institutions Swedfund, Norfund, Proparco, and British International Investment (BII) have all committed capital to the fund, demonstrating a coordinated effort to bolster long-term investment in Africa’s burgeoning green economy. These partnerships are expected to strengthen access to vital capital for businesses that can demonstrably reduce carbon emissions and protect biodiversity.
Adding further weight to the fund’s appeal, MOL, a prominent Japanese shipping company with nearly a century of operational history, announced its strategic investment last year. The move highlights a notable shift for the company, traditionally focused on logistics, towards actively supporting sustainable business growth and addressing social and environmental issues in Africa.
Novastar Ventures, with headquarters in the UK and on-the-ground presence in Nairobi and Lagos, screens over 100 startups annually and has a track record of investing in innovative ventures across various sectors, including e-mobility, agriculture, healthcare, telecommunications, and fintech.
The Novastar III fund, began deploying capital in June 2024, targeting a wide array of sectors beyond those traditionally associated with venture capital, including affordable housing, retail, and consumer goods, all with a sustainability lens. This broad scope reflects a growing recognition that sustainable practices can be integrated across diverse industries.
A recent example of Novastar’s investment strategy in action is its $3M backing of Sistema.bio, a global leader in biogas technology for family farmers. This marked the first investment from the new People+Planet Fund and will enable Sistema.bio to expand its reach across Africa, providing biodigesters that convert farm waste into renewable energy and organic fertiliser.
Steve Beck, Co-founder and Managing Partner at Novastar Ventures, highlighted the dual benefits of such investments, stating that Sistema.bio’s technology “not only brings economic and health benefits but also builds resilience to climate change.”
The involvement of both European development finance and a major Japanese corporation like MOL in Novastar III Africa People + Planet fund signals a maturing of the impact investing landscape in Africa. It demonstrates a growing understanding among international investors that addressing the continent’s pressing social and environmental challenges can also unlock significant economic opportunities.