24 May 2023
E3 Capital and Lion’s Head Global Partners have made an initial announcement regarding the E3 Low Carbon Economy Fund for Africa. The fund aims to invest in emerging low-carbon entrepreneurs in Africa who are utilizing new technologies and business models associated with the low-carbon economy.
The fund will provide investment to early-stage companies and will reserve significant capital for subsequent funding rounds. It has already reached its first funding milestone, securing $48.1 million, and is targeting a final close of up to $100 million within a year.
Clemens Calice, CEO of Lion's Head, expressed optimism about supporting low-carbon businesses in Africa, as they begin to demonstrate potential for substantial growth. Calice acknowledged the expertise of the E3 team in working with early-stage companies across the continent and highlighted their existing portfolio, which is showing promising signs. He emphasized the excitement of supporting a new generation of entrepreneurs.
The fund has garnered support from various organizations, including KfW (in collaboration with BMZ, the German Ministry for Economic Cooperation and Development), FMO, Swedfund International AB, and PROPARCO. These backers share a belief in the innovative potential of vibrant African entrepreneurs and are committed to building an equitable and resilient global economy.
The investment focus of the fund remains on early-stage companies and ensuring adequate capital for subsequent funding rounds. It has reached its first funding milestone at $48.1 million and aims to achieve a final close of up to $100 million within 12 months.
E3 Capital and Lion’s Head have joined forces to leverage their experience and presence in Africa. E3 Capital currently manages a €75M fund (EAVF I) that invests in decentralized energy businesses across Africa, with investments in East, West, and Southern Africa. Lion’s Head is an established asset manager with a focus on emerging and frontier markets, managing over $700 million in assets. They also provide corporate finance advisory services to governments, multilateral, and private companies through a subsidiary. Together, they have invested over $400 million in 30 African countries. E3LCEF is a Luxembourg-based fund, with Lion's Head serving as the Alternative Investment Fund Manager (AIFM) and E3 Capital as the Fund Adviser.
Recognizing the significance of local knowledge alongside international best practices, the investment team is based in Nairobi. Both parties are excited to leverage their extensive experience to contribute to the transition towards a low-carbon economy in Africa.
Paras Patel, Founder, and Managing Partner of E3 Capital, highlighted the emergence of African businesses with clear product-market fit and strong commercial potential within the low-carbon economy. Patel expressed passion for supporting African entrepreneurs in building the next generation of innovative businesses that can make a significant impact in the years to come. Patel expressed gratitude for the support received from investors and anticipated engaging with existing and new entrepreneurs shortly.
Stephanie Lindemann-Kohrs, Director of the Equity Finance Department at KfW Development Bank, emphasized that KfW is acting as an anchor investor in the E3 Low Carbon Economy Fund I. She praised the expertise and positive track record of the E3 Management team and Lion's Head in driving the fund's investment strategy. Lindemann-Kohrs believed that the fund's investments would play a substantial role in achieving climate neutrality and climate justice in Africa.
Linde Lassche, Investment Officer at FMO, commended the E3 team for their contribution to the energy transition and their ability to identify talented entrepreneurs, particularly in new sector segments and fragile states. Lassche expressed excitement about continuing the partnership with the E3 team, as it aligns with FMO's direct venture capital strategy.
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