Africa Renewable Energy Fund II achieves first close at €130 mn

Renewable energy in Cambodia

The Africa Renewable Energy Fund II has achieved its first close at €130 million, following a joint investment of €17.5 million from The Sustainable Energy Fund for Africa and the Climate Technology Fund through the African Development Bank.

AREF II, a successor to the original Fund, is a 10-year closed-ended renewable energy Private Equity Fund with a $300 million target capitalization. The Africa Renewable Energy Fund II, managed by Berkeley Energy, invests in early-stage renewable energy projects.

The Sustainable Energy Fund for Africa and the Climate Technology Fund will each contribute roughly €8.7 million to mobilize private-sector investment into Africa’s renewable energy sector. The Sustainable Energy Fund for Africa will contribute financing to the AREF II Project Support Facility, which funds technical assistance and early-stage project support to improve bankability.

Other investors include the U.K’s CDC Group, Italy’s CDP, the Netherlands Development Finance Company (FMO) and SwedFund.

In 2012, the African Development Bank selected Berkeley Energy, a fund manager of clean energy projects in emerging markets to set up AREF.

Luka Buljan, Berkeley Energy’s Managing Director, said: “The catalytic tranche from the Sustainable Energy Fund for Africa and the Climate Technology Fund will assist in mobilising private institutional investors up to full fund size of €300 million.”

“AREF is intertwined with the Sustainable Energy Fund for Africa’s history and success, and we have worked over the last decade to create precedents in difficult markets and challenging technologies,” said Joao Duarte Cunha, Manager for Renewable Energy Initiatives at the African Development Bank and Coordinator of the Sustainable Energy Fund for Africa.