Written By: Jim Greenberg
The African Renewable Energy Fund (AREF), a fund established to deliver clean energy in Sub-Saharan Africa, has closed with US$100 million of committed capital to support small-scale to medium-scale renewable energy projects.
The fund, which will be headquartered in Nairobi, will use capital to support renewable energy projects that range in capacity from five to 50 megawatts (MW), including solar, wind, biomass, geothermal, small hydro and waste gas technologies.
Berkeley Energy Africa Limited – a fund manager committed to developing and investing renewable energy markets in emerging markets, will manage the AREF fund as a joint initiative by the African Biofuel and Renewable Energy Company (ABREC) and the African Development Bank (AfDB).
AfDB will also serve as the fund’s lead sponsor and has so far contributed $65 million in the form of an equity investment package and climate market instruments designed to augment institutional investments.
“Over the past decade, the AfDB has established itself as a prime catalyst for renewable energy investment on the continent”, says Gabriel Negatu, AfDB Regional Director for the East Africa Regional Resource Center. “As Africa’s largest infrastructure finance partner, we understand the value of supporting both large-scale and small-scale projects as part of our strategy for Africa to promote inclusive and sustainable growth.”
Also contributing to the fund are West African Development Bank (BOAD), Ecowas Bank for Investment and Development (EBID), Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO) and Calvert Foundation.
Within 12 months, the fund is targeting a close of $200 million, while some renewable projects may receive later funding from additional investors.