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Source: African Review

The African Development Bank (AfDB) group has announced that it has approved a US$32.5mn equity investment in Climate Investor One’s (CI1) Construction Equity Fund (CEF)

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The fund’s focus on investing in early stage project development will also assure the timely implementation of well-prepared projects. (Image source: James Moran/Flickr)

CI1 is a platform that uses a unique blended finance approach and targets the entire asset lifecycle to deliver viable renewable energy projects to the market, the bank said in a press statement.

CI1 will provide capital and technical assistance for early stage project development to ensure that bankable energy projects are delivered to the market; invest equity for the construction of projects; and provide debt at competitive terms. The bank’s participation will be limited to investments within Africa.

The bank’s investment in the CI1’s CEF will be managed by Climate Fund Managers (CFM), a joint venture between the Netherlands Development Finance Company (FMO) and Sanlam InfraWorks. The fund’s focus on investing in early-stage project development will also assure the timely implementation of well-prepared projects.

Amadou Hott, the bank’s vice-president for Power, Energy, Climate Change and Green Growth, explained, “Significant investments are required to close the infrastructure gap and meet energy access goals. The bank’s investment in the fund will complement its operations in the energy sector, and unlock at least an additional US$40mn of investments into Africa.”

“With nearly 600mn Africans without access to energy, there is a huge market for the fund to invest and generate a return for its investors,” he stated.

Wale Shonibare, the bank’s director of Energy Financial Solutions, Policy and Regulation, added that the bank would be playing an important role as a knowledge repository for Africa, “enabling CFM to better gauge investment opportunities while ensuring that the highest environmental and social standards are applied to the CEF’s projects.”

Climate Investor One aligns with the bank’s new deal on energy and the High 5 priorities to ‘Light up and Power Africa’, and ‘Improve the quality of lives of Africans’.

The bank added that the CEF will have a measurable social and environmental impact by supporting the establishment of clean energy projects in developing markets, by creating jobs and providing access to electricity in an under-developed market.