AfricaGoGreen fund secures $47m to fuel climate resilience

AfricaGoGreen Fund secured $47 million in its second fundraising round to finance climate-friendly projects in Africa. Top financial organisations including the International Finance Corporation (IFC), the African Development Bank (AfDB), the Nordic Development Fund (NDF), and the Sustainable Energy Fund for Africa (SEFA) combined to provide the funding.

The funds raised will be used to purchase high-efficiency appliances and industrial equipment, retrofitting existing buildings, and new green buildings. It will also finance the installation of rooftop solar and battery storage for residential, commercial, and industrial consumers.

IFC provided $17 million in equity, with an additional $30 million in debt to the fund. The African Development Bank, the Nordic Development Fund, and the Sustainable Energy Fund for Africa each invested $10 million in equity. The remaining $10 million in debt was provided by Calvert Impact Capital in December 2022.

AfricaGoGreen Fund is the first structured debt fund in Africa focused on energy efficiency solutions. Managed by LHGP Asset Management, it aims to reach between $230 million and $250 million at final close. With the current fundraising round, total funding stands at $138 million, demonstrating that the fund is on its way to achieving its full scale.

AGGF has provided financing to AktivCo, a telecom energy services company, and BBOXX, a pay-as-you-go solar-powered solutions provider, to accelerate access to clean cooking solutions for millions of Africans. AGGF has also recently closed the Solarise transaction investing in energy-efficient appliances in Kenya, South Africa, and Mauritius. It also upsized both the AktivCo and BBOXX transactions.

The fund is accompanied by a technical assistance facility of $3.3 million from KFW on behalf of BMZ. The facility supports project development and market studies, transaction advisory, and capacity building to stakeholders. Johannes Scholl, head of division at KfW, stated that he hopes more like-minded investors will follow as the fund plays a crucial part in the just energy transition in Africa.

The innovative energy efficiency focus of AGGF is making critical capital available to businesses that support the region’s energy transformation, expand access to electricity, green building, and e-mobility solutions.

This innovative focus was the reason IFC partnered with AfricaGoGreen, according to Henrik Elschner Pedersen, IFC regional industry director in Africa for manufacturing, agribusiness, and services.

The African Development Bank and the Sustainable Energy Fund for Africa also united with other investors to build a more climate-resilient Africa and support the decarbonisation of African countries. Dr Daniel Schroth, director of the renewable energy and energy efficiency department, stated that they looked forward to seeing other like-minded development institutions and commercial investors join them in fighting the detrimental impacts of climate change on the continent.

AGGF is breaking new ground in supporting the African climate transition, said Clemens Calice, CEO of LHGP. With such a strong group of investors, there is broad alignment on the objectives of AGGF, and he is proud to meet the tasks and challenges ahead of them.

Henrik Franklin, director for portfolio origination and management at the Nordic Development Fund, praised AGGF for its trailblazing initiative to promote energy efficiency. He also praised the fund for not only financing but also strengthening the enabling environment through capacity-building and developing regulations.

Increasing access to clean and affordable energy in Africa is key to achieving the Sustainable Development Goals (SDGs) and enhancing climate resilience. NDF is a proud early-stage and catalytic investor in AGGF and looks forward to joining forces with AfDB, KfW, IFC, SEFA, Lion’s Head, and other partners to deliver climate action.

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