The Africa Renewable Energy Fund (Aref) II has concluded its first close at €130-million, following a joint investment of €17.5-million 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 ten-year closed-ended renewable energy private equity fund with a $300-million target capitalisation.
The fund, which is 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 have committed to each contribute about €8.7-million 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.
“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,” says AfDB power, energy, climate and green growth VP Dr Kevin Kariuki.
In 2012, the AfDB 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.
“We are very excited to have reached this milestone with strong support from our backers. 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 €300-million.
“We now look forward to concluding the fundraising and delivering projects that will provide clean, reliable and affordable energy across African markets,” says Berkeley MD Luka Buljan.
“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,” adds AfDB renewable energy initiatives manager and Sustainable Energy Fund For Africa coordinator Joao Duarte Cunha.