The African Renewable Energy Fund (AREF) has reached its final investment target, with US $200 million of committed capital to support small to medium scale projects on the continent.
The final close came with funding from the European Investment Bank (EIB) and the Global Energy Efficiency and Renewable Energy Fund (GEEREF), among other investors, joining the African Development Bank (AfDB) as the fund’s lead sponsor.
Climate finance instruments such as Sustainable Energy for Africa (SEFA) and the Global Environment Facility (GEF) have also invested in AREF, which held its first close of US$100 million in March last year.
Headquartered in Nairobi, it has been investing in grid-connected development stage renewable energy projects including small hydro, wind, geothermal, solar and biomass for over a year now.
AREF is the first dedicated sub-Saharan African renewable energy fund and is managed by Berkeley Energy, a fund manager focused on renewable energy projects in emerging markets.
“We are very pleased to have reached our target fund raising and look forward to continuing our work focusing on the technical delivery of our projects with our project partners from concept to generating reality,” said Berkeley Energy co-founder Alastair Vere Nicoll.
Alex Rugamba, director of energy and climate change at the AfDB, said the bank was pleased to see that AREF is now fully capitalised to deliver on its pan-African mandate.
“We are also equally excited that SEFA and GEF participation have been catalytic in mobilising significant amounts of commercial capital into AREF over a short time-frame; this is key for accelerating deployment of modern, clean and affordable energy in the continent,” he said.
EIB vice president Pim van Ballekom said the bank was committed to ensuring new projects could be implemented around the world.
“This engagement is demonstrated through our support for the Global Energy Efficiency and Renewable Energy Fund, GEEREF. Our combined backing for the African Renewable Energy Fund will provide both financial support and share technical experience essential for smaller renewable schemes being implemented for the first time,” he said.