$10M Boost for Africa’s Renewable Energy Innovators
The African Development Bank (AfDB) has invested $10 million in the Persistent Africa Climate Venture Builder Fund (ACV Fund) through its Sustainable Energy Fund for Africa (SEFA). This funding aims to accelerate climate technology entrepreneurship in Sub-Saharan Africa by addressing critical financing gaps for early-stage startups focused on innovative environmental solutions, thereby driving sustainable development and climate resilience in the region.
The catalytic funding is anticipated to leverage an additional $70 million in investments, focusing on promising ventures in sectors such as renewable energy, sustainable agriculture, and eco-friendly innovations. Importantly, the initiative gives special consideration to businesses led or managed by women, recognizing their crucial contribution to driving sustainable economic development.
*Blended Finance Model to Drive Investment*
The investment utilizes a blended finance strategy, merging public and private funds to share the risks of investing in early-stage ventures. This approach will help to entice private investors to support climate tech startups, which typically struggle to secure funding due to perceived high risks.
*Transformative Impact Anticipated*
The ACV Fund is expected to yield substantial benefits, including:
* The addition of 200 MW of renewable energy capacity.
* Renewable energy access for 420,000 households and 31,000 businesses.
* A reduction of around 17 million tons of CO2e emissions.
* The creation of 66,000 jobs, prioritizing gender equality.
*Strategic Partnership and Vision*
Wairimu Karanja, Persistent Partner and Chief Legal Officer, highlighted the fund’s potential for significant impact, saying: “The African Development Bank’s commitment demonstrates their trust in our climate investing strategy and in-depth Venture Building approach in Sub-Saharan Africa, which focuses on early-stage companies led by exceptional entrepreneurs and gender-diverse teams to achieve both climate impact and commercial viability.”
João Duarte Cunha, Manager of the AfDB’s Renewable Energy Funds Division, emphasized Africa’s critical role in addressing the climate crisis, noting: “Our goal is to mobilize risk and venture capital to support innovative African tech start-ups developing practical solutions to pressing climate and development challenges.”
*Towards a Greener Future*
The investment strengthens the AfDB’s commitment to harnessing private sector funds to tackle climate issues and drive economic growth. By supporting climate ventures with high growth potential and impact, the bank seeks to expedite Africa’s shift towards renewable energy and sustainable development.