African Renewable Energy Fund secures initial $100 million funding
African Renewable Energ Fund (AREF) has closed on an initial $100 million available for investments into grid-connected renewable energy projects in sub-Saharan Africa, including geothermal projects.
Last week, the Nairobi-based African Renewable Energy Fund (AREF) announced having closed on an initial US$100 million available for the investment into grid-connected renewable energy projects in sub-Saharan Africa.
The fund will target small and medium-sized independent power projects producing between 5 megawatts (MW) and 50 MW and is open for geothermal projects.
Managed by Mauritius-based Berkeley Energy, the fund will invest between $10 million and $30 million per project, and will have an option of seeking more funds where need arises from other investors for larger investments.
Gabriel Negatu, AfDB’s regional director for the East Africa Resource Center, said the fund manager wants to raise $200 million by the end of this year.
“The $200 million is not the end of it. The whole idea is that this is supposed to catalyse and crowd in other investors, so I can assure you that in a few years’ time we may be looking at maybe $1 billion or half a billion dollars,” he said during the fund’s launch.
AfDB has contributed $65 million of the $100 million raised so far.
AREF, which will have its headquarters in Nairobi, said in a statement that it will target projects in small hydroelectric power plants, wind, solar, geothermal and waste gas.
Negatu said the fund planned to take controlling stakes in 12 green field projects.
Other contributors include the Togo-headquartered West African Development Bank, Nigeria-headquartered Ecowas Bank for Investment and Development, Dutch development bank the Nederlandse Financierings-Maatschappij voor Ontwikkelingsladen (FMO), Togo-based African Biofuel and Energy Company, Maryland, U.S.-based ethical investment fund the Calvert Foundation, as well as fund manager Berkeley Energy.
“We hope to be able to provide resources. We hope to be able to co-finance, lead arrange, whatever way they would like us to support. We are very much committed to this,” he said.
Source: The African Report