- The African Development Bank Group (AfDB) approved a $10 million investment in the KawiSafi II Fund, targeting climate projects in sub-Saharan Africa through local businesses.
- KawiSafi II, a $200 million venture equity fund, addresses investment gaps in Africa’s energy transition and includes a $10 million technical assistance facility to enhance climate impact and ESG risk management.
- AfDB’s investment in KawiSafi II supports Africa’s energy transition and reinforces its commitment to combating climate change by leveraging private sector partnerships and innovative solutions.
The African Development Bank Group (AfDB) approved a $10 million junior equity investment in the KawiSafi II Fund. The Sustainable Energy Fund for Africa (SEFA) provided this investment to support local businesses in sub-Saharan Africa in developing and expanding climate projects that benefit vulnerable communities.
KawiSafi II, a $200 million venture equity fund, focuses on closing investment gaps in Africa’s energy transition, productivity, mobility, and logistics sectors. The fund includes a $10 million technical assistance facility to maximise climate impact and strengthen environmental, social, and governance (ESG) risk management.
KawiSafi II follows the KawiSafi Fund I, a $67 million off-grid energy fund launched in 2016. Acumen Fund, a global leader in impact investing, sponsored the first fund. With over 20 years of experience investing in companies that address global poverty, especially in the renewable energy sector, Acumen successfully supported investments in companies like Bboxx and BioLite, known for their contributions to off-grid energy solutions.
Amar Inamdar, Managing Director of KawiSafi Ventures, emphasised the significance of AfDB’s investment, saying, “The African Development Bank’s investment into KawiSafi II, our innovative climate fund, catalyses our ability to reach a first close and attract the significant private capital urgently required to support Africa’s climate innovators.” Inamdar highlighted how AfDB’s commitment will attract investments into pioneering African start-ups focused on renewable energy, clean mobility, and other crucial sectors.
João Duarte Cunha, Manager of the AfDB’s Renewable Energy Funds Division, which oversees SEFA, expressed enthusiasm about the investment, stating, “The KawiSafi Fund II offers an opportunity to provide more venture and growth capital to emerging businesses linked to energy access and energy transition at a time when such capital is most needed in the market.”
The AfDB’s investment in KawiSafi II aligns with its commitment to supporting a just energy transition and combating climate change. The Bank achieves this through strategic partnerships with the private sector and by investing in innovative solutions.
SEFA, a multi-donor Special Fund managed by the AfDB, catalyses private sector investments in renewable energy and energy efficiency across Africa. The Fund offers technical assistance and concessional finance to overcome market barriers, build a strong project pipeline, and improve the risk-return profile of investments. SEFA aims to contribute to universal access to affordable, reliable, sustainable, and modern energy services in Africa, aligning with the New Deal on Energy for Africa and Sustainable Development Goal 7.
KawiSafi Funds exemplify the patient and risk-tolerant capital required to support growing African climate businesses. These businesses seek to penetrate new markets despite the significant shortage of equity capital. AfDB’s investment in KawiSafi II Fund reinforces its commitment to Africa’s energy transition and climate innovation.