Five new private companies committed to invest $50 million towards bringing renewable energy to sub-Saharan Africa and Asia.
In sub-Saharan Africa alone, 600 million people live without access to electricity – this is set to change as five new partners join UN Environment’s Seed Capital Assistance Facility (SCAF), committing to deliver clean energy to those who need it most.
Renewables have the potential to greatly improve quality of life, economic development and environmental sustainability.
Globally, investment in renewables reached a remarkable $285.9 billion in 2015 – largely driven by developing nations – but more needs to be done to keep pace with swelling populations.
Entrepreneurs have the power to transform markets, but funding is often difficult to secure as clean energy projects can be seen as too risky to third parties.
According to UN Environment, the SCAF helps to fill the gap between the “lack of bankable projects” and available finance; helping “managers of private equity funds and development companies provide that necessary seed financing and enterprise assistance to early-stage clean energy project developers and entrepreneurs.”
The second phase of the SCAF began in 2016 and five new agreements have already been signed with fund managers engaged in clean energy projects in sub-Saharan Africa and Asia.
DI Frontier Market Energy, Carbon Fund and JCM Clean Development Fund have received support for strengthening of their renewable energy projects in sub-Saharan Africa.
They have received co-funding for the development of several projects, including an 80 megawatt (MW) solar project in Northern Nigeria.
In Asia, windfarm project developer The Blue Circle received co-funding support for the development of three projects in Vietnam, Cambodia and Indonesia.
Olivier Duguet, CEO of The Blue Circle, said the Facility was “a great instrument that helps us seize opportunities we would otherwise find difficult to take. SCAF provides adequate support to bake our ventures in promising but rather untapped frontier markets.”
In East Africa, Zoscales Partners received support for the establishment of the East Africa Growth Equity Fund – an Ethiopian fund for small and medium-sized enterprises with a focus on resource efficiency.
Jacop B. Rentschler, Managing Partner of Zoscales, said: “Small and Medium Enterprises belong to Africa’s most important private sector participants. Through the financial support from SCAF we can overcome liquidity constraints during the fundraising period and once operational help our investee companies reduce environmental footprint.”
While in West Africa, GreenWish Partners has been granted funds to develop both on- and off-grid renewable energy projects, including its 20 MW Senergy photovoltaic plant in Northern Senegal.
The five funds are aiming for a total of more than $363 million, of which nearly $35 million will go to seed investing in addition to $15 million of support to help transfer this early-stage support to clean-energy entrepreneurs.
Ultimately, the Facility hopes to advance the Paris Agreement’s target of keeping the global temperature rise below 2 degrees Celsius within this century.