• Tuesday, February 27, 2024
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FSD Africa Investment commits N$19.5m to climate resilience in Africa

FSD Africa invests £10m in InfraCredit’s risk-sharing facility

FSD Africa Investments (FSDAi), the investing arm of FSD Africa has announced new investments totalling $19.5 million to support climate adaptation and climate-aligned infrastructure projects in Africa.

This is also to promote the continent’s resilience to climate change.

The investments in Acre Impact Capital’s Export Finance Fund I, Catalyst Fund and Camco’s Spark Energy Services, demonstrate FSDAi’s commitment to partnering with local asset managers and venture builders to support climate-smart projects that would otherwise struggle to access the finance they need.

The new commitments include $12 million in Acre Impact Capital’s Export Finance Fund I, the first to address the lack of commercial debt financing for sustainable infrastructure projects guaranteed by official Export Credit Agencies (ECAs).

The second is $4.5 million in Catalyst Fund, a pre-seed venture capital fund and accelerator that will invest in and provide hands-on venture building support to tech start-ups that aim to improve the resilience of climate-vulnerable communities across Africa. The investment will help demonstrate venture building as an investible model that can accelerate the growth of climate-smart businesses in Africa with a target of creating or accelerating 40 businesses and helping 5m individuals and households to adapt to the effects of climate change.

While $3 million went into Spark Energy Services (Spark), which is designed and managed by climate and impact fund manager Camco to provide financing to captive solar and energy efficiency developers in Sub-Saharan Africa.

FSDAi makes investments in support of ‘innovative’ financial instruments, facilities and intermediaries that can accelerate the role of finance in Africa’s green economic growth. It is funded through UK International Development from the Foreign, Commonwealth & Development Office (FCDO).

The new investments will be announced by Andrew Mitchell, UK Minister for Development, at a joint event being held by FSD Africa and PIDG during the Africa Climate Summit on September 5th. It is one of a number of transactions and market-building initiatives being unveiled by FSD Africa during the Summit which are designed to create a more innovative financing environment and boost the participation of international and domestic private capital in Africa’s green economy.

Commenting on the investments Andrew Mitchell, UK minister for Development, said: “The climate finance projects we announced demonstrate the strength of our commitment to Africa’s green future. UK leadership is determined to unlock the funding needed internationally to drive forward the green agenda. Our ambitions can only be realised through partnership and cooperation, with Africa and the international community. We are stronger together – and we go far when we go.”

Anne-Marie Chidzero, chief investment officer, FSD Africa Investments, said: “For Africa to achieve a green economic growth pathway, access to green finance needs to be scaled up. Our mission is to enable investments to flow by taking more risk and working with local intermediaries to bridge the gaps in the current financing structures. We are backing these three funds, which provide innovative ways to finance businesses that will make a big contribution to Africa’s green economy.”

Read also: FSDAi, Infracredit invest £10m to support Nigeria’s climate infrastructure

The new investments will be announced by Andrew Mitchell, UK Minister for Development, at a joint event being held by FSD Africa and PIDG during the Africa Climate Summit on September 5th. It is one of a number of transactions and market-building initiatives being unveiled by FSD Africa during the Summit which are designed to create a more innovative financing environment and so boost the participation of international and domestic private capital in Africa’s green economy.

Commenting on the investments Andrew Mitchell, UK minister for development, said: “The climate finance projects we announced demonstrate the strength of our commitment to Africa’s green future. UK leadership is determined to unlock the funding needed internationally to drive forward the green agenda. Our ambitions can only be realised through partnership and cooperation, with Africa and the international community. We are stronger together – and we go far when we go.”

Anne-Marie Chidzero, chief Investment officer, FSD Africa Investments, said: “For Africa to achieve a green economic growth pathway, access to green finance needs to be scaled up. Our mission is to enable investments to flow by taking more risk and working with local intermediaries to bridge the gaps in the current financing structures. We are backing these three funds, which provide innovative ways to finance businesses which will make a big contribution to Africa’s green economy.”