The Nairobi-based African Renewable Energy Fund (AREF) yesterday announced its initial closing with US$100 million available to spur investment in grid-connected renewable energy projects in sub-Saharan Africa.
Solar projects of 5-50 MW in scale will be able to secure $10-$30 million of financial backing for development, along with projects in small hydro, wind, geothermal, biomass and waste gas, with the fund indicating further project funding may be available for larger projects.
The African Development Bank is the largest sponsor of the fund in the initial round, committing $65 million from its reserves as well as money from the Sustainable Energy for Africa fund and the Global Environment Facility.
Mauritian fund management company Berkeley Energy Africa, which specializes in energy investments in Africa and Asia, will manage AREF as well as contributing to the funds available, with the facility hoping to generate a further $100 million of capital commitments within 12 months.
The other investors in the first round of AREF capital-raising are Togolese-headquartered institutions the West African Development Bank and the African Biofuel and Renewable Energy Company; the Nigeria-headquartered Ecowas Bank for Investment and Development; Dutch development bank the Nederlandse Financierings-Maatschappij voor Ontwikkelingsladen; and Maryland, U.S.-based ethical investment fund the Calvert Foundation.