It appears renewable energy startups in Africa may have found the perfect square peg in a square hole with Accion Venture Lab Fund and other VCs launching funds to tackle one of Africa’s greatest problems — electricity .
Thanks to Evolution II, a closed-end sub-Saharan Africa fund, there is now a new investment fund worth USD 216 Mn for startups in Africa’s renewable energy sector. Investment in the fund came from several international investors.
Here Is The Deal
- The main investors in the new fund included: European Investment Bank (EIB), Commonwealth Development Corporation (CDC Group), the UK Government’s Development Finance Agency and KLP Norfund Investments of the Norwegian Government.
- A number of private investors also took part in the funding round for the ten-year closed-end fund.
- The fund belongs to Inspired Evolution, an Africa-focused investment advisory firm that specializes in the clean energy sector. The company planned the fundraising through its platform.
“Investing in clean energy is a key priority for CDC Group and investing in the Evolution II fund will improve access to renewable energy in sub-Saharan Africa, thus contributing to the fight against climate change. We look forward to a collaborative and productive partnership,” said Setor Lassey, Director of CDC Group’s Investment Funds and Partnerships Team for Africa.
The Impact of Evolution II Fund So Far
The impact of Evolution II in energy sector investment in Africa are many. In February 2019, the fund invested USD 7.47 Mn in Commercial Energy South Africa which is an affiliate of SolarAfrica. The platform provides funding solutions for long-term private commercial and industrial (C&I) solar PV customers, through SolarAfrica’s network of EPC contractor partners.
Although Africa has not taken maximum advantage of its renewable energy resources, the continent has increased its renewable energy capacity. As of 2014, the continent had 1.8 gigawatts of renewable energy capacity, this is according to a report by Bloomberg New Energy Finance.
Thanks to renewable energy, millions of people are accessing electricity for the first time as the continent moves to leverage renewable energy to increase generation capacity.
Read Also:How Startups In Nigeria Are Disrupting Nigeria’s Electricity Problems
The sector has received a major financial injection which will be channelled to finance renewable energy companies and projects across Africa.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.