AfricaGoGreen Fund Closes $47M in New Equity Investments to Increase Climate Resilience in Africa | African Development Bank

The AfricaGoGreen Fund (AGGF) made headlines today with the announcement of the successful second fundraising close, raising $47 million in combined investments from leading financial organizations including the International Finance Corporation (IFC), the African Development Bank (AfDB ), the Nordic Development Fund (NDF) and the Sustainable Energy Fund for Africa (SEFA).

The funding will enable AGGF to broaden its funding for climate-friendly projects in Africa, including purchasing high-efficiency appliances and industrial equipment, retrofitting existing buildings and new green buildings, and installing rooftop solar and battery storage for residential, commercial and industrial consumers. .

IFC provided $17 million in equity capital, including funding from the IDA20 Private Sector Window Blended Finance Facility. In addition to equity, IFC has committed $30 million in debt to the fund, providing AGGF with long-term capital to complete its second close fundraise.

The African Development Bank, the Nordic Development Fund and the Sustainable Energy Fund for Africa each invested $10 million in equity. An additional $10 million of debt from Calvert Impact Capital was closed in December 2022.

AGGF was launched in early 2021 by KfW on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and managed by LHGP Asset Management. It is the first structured debt fund in Africa to focus on energy efficiency solutions. The fund 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 gaining traction to reach its full size.

AGGF is joined by a $3.3 million technical assistance facility from KFW on behalf of BMZ, which supports project development and market studies, and provides transaction advisory and capacity building to stakeholders. Fully operational since 2021, AGGF has provided funding to AktivCo, a telecom energy services company, to develop clean energy solutions to power telecommunications towers in Burkina Faso, Cameroon, Chad, Ivory Coast and Niger, and to BBOXX, a pay-as-you-go provider of solar energy solutions, to accelerate access to clean cooking solutions for millions of Africans.

AGGF also recently closed the Solarise transaction by investing in energy efficient appliances in Kenya, South Africa and Mauritius, and increasing both the AktivCo and BBOXX transactions.

“KfW is pleased to welcome the new investors to the AfricaGoGreen Fund, which was initiated with seed money from the German government. We hope that more like-minded investors will follow. This successful second fundraising shows that the fund is on track to play a crucial role in the just energy transition in Africa,” said Johannes Scholl, head of division at KfW.

“IFC is partnering with AfricaGoGreen because its innovative focus on energy efficiency provides critical capital to companies supporting energy transformation in the region while expanding access to electricity, green building and e-mobility solutions,” said Henrik Elschner Pedersen, IFC Regional Industry Director in Africa for manufacturing, agribusiness and services.

“It is with great pride that the African Development Bank and the Sustainable Energy Fund for Africa have united other investors with the same ambition to build a more climate resilient Africa and support the decarbonisation of African countries. We look forward to other like-minded development institutions and commercial investors join us in the fight against the damaging impacts of climate change on the continent,” said Dr. Daniel Schroth, director of the Renewable Energy and Energy Efficiency Division.

Henrik Franklin, Director Portfolio Origination and Management, Nordic Development Fund, said: “Increasing access to clean and affordable energy in Africa is essential to achieving the SDGs and increasing climate resilience. AGGF is a pioneering initiative to promote energy efficiency, not only through financing, but also by strengthening the supportive environment through capacity building and regulatory development.

NDF is a proud early stage and catalyst investor in AGGF and looks forward to collaborating on climate action with AfDB, KfW, IFC, SEFA, Lion’s Head and other partners,” said Franklin.

“With AGGF we are breaking new ground in supporting the African climate transition. The urgency to combat global warming forces us all to do everything we can to reduce CO2 emissions. This is exactly what AGGF was founded for. Having such a strong group of investors demonstrates broad alignment with AGGF’s objectives. We are proud to be given the opportunity to meet the tasks and challenges ahead,” said Clemens Calice, CEO of LHGP.

ABOUT KFW

KfW is one of the world’s leading promotional banks. Since 1948, KfW has been committed to improving economic, social and environmental living conditions around the world on behalf of the Federal Republic of Germany and the Länder. To do this, it has made available a total of €166.9 billion in funds in 2022 alone. The funding and promotion services are aligned with the United Nations 2030 Agenda and contribute to the achievement of the 17 Sustainable Development Goals. For more information, please visit: https://www.kfw.de/kfw.de-2.html

ABOUT IFC

IFC, a member of the World Bank Group, is the largest global development institution focusing on the private sector in emerging markets. We work in more than 100 countries and use our capital, expertise and influence to create markets and opportunities in developing countries. In Fiscal Year 2022, IFC pledged a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and drive shared prosperity while economies are grappling with the consequences of global crises that are intensifying. For more information, visit www.ifc.org.

ABOUT THE AFRICAN DEVELOPMENT BANKING GROUP

The African Development Bank Group is Africa’s leading development finance institution. It consists of three different entities: the African Development Bank, the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 34 African countries and with an office in Japan, the Bank Group contributes to the economic development and social progress of its 54 regional member states. For more information: www.afdb.org.

ABOUT SEFA

SEFA is a multi-donor dedicated fund that aims to unlock private sector investment that helps provide universal access to affordable, reliable, sustainable and modern energy services for all in Africa, in line with the New Deal on Energy for Africa strategy of the Bank and Sustainable Development Goal 7. For more information: www.afdb.org/sefa.

ABOUT NDF

The Nordic Development Fund (NDF) is the joint Nordic international financial institution of the five Nordic countries: Denmark, Finland, Iceland, Norway and Sweden. NDF focuses on the relationship between climate change and development in low-income countries and countries in fragile situations. Since the introduction of the climate mandate in 2009, NDF has built a track record of adding value by financing climate mitigation and adaptation projects in close interaction with its extensive network of strategic partners. www.ndf.int.