By Macharia Kamau
The Africa Renewable Energy Fund (Aref), which aims to invest in projects in sub-Saharan Africa, has raised $100 million (Sh8.6 billion), lead investor African Development Bank (AfDB) said yesterday.
The funds, to be doubled by end of this year, will finance small to medium scale independent power producers (IPPs) putting up power plants with a capacity of between five and 50 megawatts.
The fund is targeting a final close of $200 million (Sh17.2 billion) within the next 12 months. AfDB will be the fund’s lead sponsor, with $65 million in an equity investment package.
“We understand the value of supporting both large-scale and small-scale projects as part of our strategy for Africa to promote inclusive and sustainable growth,” said Gabriel Negatu, AfDB’s regional director for the Eastern Africa Resource Centre.
Waste gas
The money will be invested in grid-connected development stage renewable energy projects including small hydro, wind, geothermal, solar, biomass and waste gas.
Aref will be managed by Berkeley Energy Africa Limited (Berkeley Energy), a fund manager focused on developing and investing in renewable energy projects in emerging markets in the continent.
The fund will target IPPs with an ideal size of between 5mw and 50mw and a commitment per project of between $10 million and $30 million with the capacity to source further funding from co-investors where necessary for a larger investment.
Other investors in Aref include West African Development Bank (BOAD), Ecowas Bank for Investment and Development, Nederlandse Financierings, Maatschappij voor Ontwikkelingslanden NV, Calvert Foundation, Berkeley Energy and Africa Biofuel and Renewable Energy Company.
There are many power producers planning to generate within sub-Saharan Africa to meet rising demand.
