African Renewable Energy Fund closes on $200m hard-cap

Anchored by the African Development Bank, the fund attracted a mixture of DFI and private capital and has already clinched four deals.

The African Renewable Energy Fund (AREF), sub-Saharan Africa’s first renewables fund, has closed on its $200 million hard-cap backed by a plethora of development finance institutions (DFIs) and private capital.

AREF was anchored with a $55 million investment by the African Development Bank (AfDB), reaching a $100 million first close last March. Other limited partners include the West African Development Bank, Ecowas Bank for Investment and Development, FMO, Calvert Investments, CDC Group, BIO, the Development Bank of Austria, Wallace Global Fund, Sonen Capital, Berkeley Energy, ABREC, the European Investment Bank, the Global Energy Efficiency and Renewable Energy Fund, and a number of other private investors.

The fund is managed by Berkeley Energy, which also runs a number of renewable energy funds in Asia, and will be headquartered in Nairobi. It benefits from a $10 million project support facility provided by the Sustainable Energy Fund for Africa (SEFA), a multi-donor vehicle managed by the AfDB, and can also access grants from the Global Environment Facility (GEF). The fund has already closed four deals and is developing a pipeline spanning small hydro, wind, geothermal, solar and biomass.

“SEFA and GEF participation have been catalytic in mobilising 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,” commented Alex Rugamba, the AfDB’s director of Energy and Climate Change Department.

This article was first published on Low Carbon Energy Investor, Infrastructure Investor’s sister website covering energy transition markets.