Timely boost for Africa Renewable Energy Fund (II) 

Source: Timely boost for Africa Renewable Energy Fund (II) | The Standard


THE Africa Renewable Energy Fund II (AREF II) recently attained its first close at £130 million, following a joint investment of £17.5 million from the Sustainable Energy Fund for Africa (SEFA) and the Climate Technology Fund (CTF) through the African Development Bank.

In a statement, the African Development Bank group (AfDB) said SEFA and CTF will each contribute roughly £8.7 million to mobilize private-sector investment into Africa’s renewable energy sector.

SEFA will also contribute financing to the Africa Renewable Energy Fund II (AREF II) project support facility which funds technical assistance and early stage project support to improve bankability.

“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.” reads part of the statement.

“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. We look forward to continued collaboration to accelerate the energy transition in Africa,” said Joao Duarte Cunha, Manager for Renewable Energy Initiatives at AfDB, coordinator of SEFA.

AfDB also revealed that there were other different investors such as the UK’s CDC Group, Italy’s CDP, the Netherlands Development Finance Company (FMO) and SwedFund.

“We are proud to be associated with Berkeley Energy and other like-minded investors, and look forward to AREF’s continued success and leadership in promoting sustainable power development on the continent,” said Kevin Kariuki, the AfDB vice-president.

AfDB said in 2012, the African Development Bank selected Berkeley Energy, a seasoned fund manager of clean energy projects in global emerging markets to set up AREF.

“AREF II has a sharper strategic focus than its predecessor on green baseload projects that will deliver firm and dispatchable power to African power systems through hydro, solar, wind and battery storage technologies.”

Luka Buljan, Berkeley Energy’s managing director said the catalytic tranche from SEFA and CTF will assist in mobilising private institutional investors up to full fund size of £300 million.

“We now look forward to concluding the fundraising and delivering projects that will provide clean, reliable and affordable energy across African markets,” he said.

SEFA is an African Development Bank-managed special fund providing catalytic finance for renewable energy. SEFA’s overarching goal is to contribute to universal access to affordable, reliable, sustainable, and modern energy services for all in Africa, in line with the Bank’s New Deal on Energy for Africa and Sustainable Development Goal 7. SEFA was established in 2011 in partnership with the government of Denmark and has since received contributions from the Governments of United States, United Kingdom, Italy, Norway, Spain and Sweden, Nordic Development Fund and Germany. SEFA is housed in the Renewable Energy and Energy Efficiency Department (PERN) under the Power, Energy, Climate, and Green Growth (PEVP) complex.

The $5.4 billion CTF is one of the two multi-donor trust funds within the wider Climate Investment Funds (CIF). It promotes scaled-up financing for demonstration, deployment and transfer of low-carbon technologies with significant potential for long-term greenhouse gas emissions savings. The Bank became an Implementing Entity of the CIF in 2010 and since then has approved over $588 million in CTF resources for a total of 10 projects across Africa.