Africa50, a pan-African infrastructure investment platform, is establishing a $500m fund dedicated to bolstering climate-friendly projects across the continent. The move comes as African governments increasingly prioritize expanding access to electricity and mitigating the impacts of climate change.
The new fund, dubbed the Alliance for Green Infrastructure in Africa (AGIA), will focus on off-grid power companies and distributed renewable energy solutions. It will be structured with a $400m component for project development and a $100m allocation for project preparation, according to Alain Ebobissé, Africa50’s chief executive. Speaking at a conference in Tanzania, Mr. Ebobissé highlighted the fund’s broad remit, encompassing sectors from renewable energy generation to sustainable transport.
This initiative follows a recent conference convened by the World Bank and the African Development Bank (AfDB) focused on extending electricity access to 300 million Africans by 2030. Africa50’s new fund aligns with these efforts and aims to catalyze significant private investment in the sector. “With such a fund, you can catalyze $10bn worth of investments,” Mr. Ebobissé stated, adding that the first closing of the fund is expected in the first half of the year.
In addition to AGIA, Africa50 is also launching a separate $200m climate-oriented Africa solar fund in partnership with the International Solar Alliance. This fund will specifically target companies specializing in distributed renewable energy, including solar-powered mini-grids and home systems. Furthermore, discussions are underway with the Nigerian Sovereign Investment Authority and Sustainable Energy For All, a UN-backed initiative, to create a Nigeria-focused fund for distributed renewable energy. The size of this fund is yet to be determined.
Africa50 is also collaborating with the World Bank and the AfDB on the deployment of these technologies. These new initiatives represent a considerable expansion for Africa50, which currently manages three existing investment vehicles: Africa50-Project Development, Africa50-Project Finance, and the Africa50 Infrastructure Acceleration Fund.
The funding for these ventures will be drawn from a variety of sources. Africa50’s existing infrastructure fund has attracted capital from 16 African institutional investors, including sovereign wealth funds and commercial banks, with the International Finance Corporation as the sole non-regional backer. Mr. Ebobissé emphasized the organization’s commitment to further tapping into the estimated $2.3tn held by African institutional investors.
Over the past seven years, Africa50 has invested in 28 projects across 27 African countries and currently manages $1.1bn in assets. The organization is nearing completion of financing for Africa’s first large-scale public-private partnership for electricity transmission lines, a project involving Power Grid of India and the Kenyan government. Africa50 has also signed memoranda of understanding to explore similar projects in Mozambique, Tanzania, and Gabon.