The Africa Renewable Energy Fund II has achieved its first close at US$154.93mn, following a joint investment of US$20.86mn from The Sustainable Energy Fund for Africa and the Climate Technology Fund through the African Development Bank (AfDB)
AREF II, a successor to the original Fund, is a 10-year closed-ended renewable energy Private Equity Fund with a US$300mn target capitalisation. The Africa Renewable Energy Fund II, managed by Berkeley Energy, invests in early-stage renewable energy projects, thereby not only de-risking the most uncertain phase of power projects, but also promoting increased green baseload in Africa’s generation mix.
The Sustainable Energy Fund for Africa and the Climate Technology Fund will each contribute roughly US$10.37mn to mobilise private-sector investment into Africa’s renewable energy sector. The Sustainable Energy Fund for Africa will also contribute financing to the AREF II Project Support Facility, which funds technical assistance and early-stage project support to improve bankability.
Other investors include the U.K’s CDC Group, Italy’s CDP, the Netherlands Development Finance Company (FMO) and SwedFund.
Luka Buljan, Berkeley Energy’s managing director, said, “The catalytic tranche from the Sustainable Energy Fund for Africa and the Climate Technology Fund will assist in mobilising private institutional investors up to full fund size of US$357.54mn.”
“AREF is intertwined with the Sustainable Energy Fund for Africa’s history and success, and we have worked closely over the last decade to create precedents in difficult markets and challenging technologies,” commented Joao Duarte Cunha, manager for Renewable Energy Initiatives at the AfDB and coordinator of the Sustainable Energy Fund for Africa.
