The AfricaGoGreen Fund (AGGF) has received $87 million in funding from a consortium of investors to expand its financing for climate-friendly projects in Africa. The fund, which invests in projects that mitigate or reduce greenhouse gas emissions, received $47 million in equity and $40 million in debt in its second fundraising round. The investors include the International Finance Corporation (IFC), the African Development Bank, the Nordic Development Fund, the Sustainable Energy Fund for Africa, and Calvert Impact Investments.
AGGF will use the funds to purchase high-efficiency appliances and industrial equipment, retrofit existing buildings and build new green buildings, and install rooftop solar and battery storage for residential, commercial, and industrial consumers. Henrik Elschner Pedersen, IFC Regional Industry Director in Africa for Manufacturing, Agribusiness, and Services, said that the fund's focus on energy efficiency was critical to expanding access to electricity, green building, and e-mobility solutions in the region.
The IFC provided $17 million in equity and $30 million in debt to the fund, while the African Development Bank, the Nordic Development Fund, and the Sustainable Energy Fund for Africa each invested $10 million in equity. An additional $10 million in debt from Calvert Impact Capital was closed in December 2022.
AGGF is the first structured debt fund in Africa focused on energy efficiency solutions. The fund targets reaching between $230 million and $250 million at the final close. With the current fundraising round, total funding stands at $138 million, demonstrating that the fund is gaining traction to reach its full scale.
AGGF is accompanied by a technical assistance facility of $3.3 million provided by KfW on behalf of BMZ, which supports project development and market studies and provides transaction advisory and capacity-building services to stakeholders.
Since becoming fully operational in 2021, AGGF has provided financing to AktivCo, a telecom tower distributed generation energy services company, to develop clean energy solutions for powering telecommunication towers in Burkina Faso, Cameroon, Chad, Côte d’Ivoire, and Niger, and to BBOXX, a pay-as-you-go solar-powered solutions provider, to accelerate access to clean cooking solutions for millions of Africans. AGGF has also more recently closed the Solarise transaction, investing in energy-efficient appliances in Kenya, South Africa, and Mauritius, and upsized both the AktivCo and BBOXX transactions.
Johannes Scholl, Head of Division at KfW, said that the fund's success in its second fundraising round showed that it was on track to play a critical role in Africa's just energy transition. He added that KfW was glad to welcome new investors to the AfricaGoGreen Fund, which was initiated with seed capital from the German government, and hoped that other investors would follow suit.
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