At Cygnum Capital Asset Management, we are the authorised manager of five pioneering funds, with over US$ 850 million of assets under management. Our services here include fund-raising, investments / capital deployment and portfolio management, with clients in 28 African countries, giving us unique insights into the African continent and other emerging markets.
The African Local Currency Bond Fund (ALCBF) was conceived by KfW to address the current underdevelopment of local currency bond markets in Africa. The fund focuses on improving access to long-term funding in local currency, strengthening the capacity of local markets, and creating opportunities for local investors by acting as an anchor investor. The ALCBF also provides technical assistance for local currency bond issuances by financial service providers and companies operating in developmental sectors. To date, the fund has invested over $250m in over 45 companies across 19 African countries in sectors such as financial inclusion, agriculture, housing and renewable energy sectors.
The Facility for Energy Inclusion’s Off-Grid Energy Access Fund (OGEF) has been structured by Lion’s Head in partnership with the African Development Bank and Nordic Development Fund. OGEF offers a flexible, pragmatic and context driven approach to transaction structuring, provides local currency options to reduce risk for borrowers and their customers, and help create lasting local capital markets participation in the sector. As with the ALCBF, OGEF also provides technical assistance to companies to support market development. OGEF, with a target size of $100-150m, raised $58m at first close in August 2018, and is now actively investing.
The Facility for Energy Inclusion has been particularly designed to support small-scale Independent Power Producers (IPPs), mini-grids and captive power projects by providing various debt products, including corporate and project loans, construction/bridge loans and mezzanine finance, in both hard and local currencies. Focusing on smaller facility it envisages bringing electricity to smaller countries or regions that are not adequately serviced by the main grid. Eligible investments are projects using renewable energy technology with capital expenditures of less than US$ 30 million and a capacity below 25MW.
The AfricaGoGreen Fund (AGG) was initiated by KfW to promote private investments which mitigate or reduce the emission of Green House Gases (GHG). The fund seeks to encourage the transition to less carbon intensive economic development by providing medium and long-term debt, mezzanine financing, and technical assistance to corporate and industrial entities, local financial institutions and ‘Partner Institutions’ which are developing and/or investing in eligible Energy Efficiency and Renewable Energy projects. The AGG has been launched with €32 million and a Technical Assistance Facility of €3million and anticipates growing to €150 million in the next 18 months and will focus particularly on Compact with Africa countries in West Africa. Please see our AGG SFDR disclosures here.
E3 Capital, formerly Energy Access Ventures, has partnered with Cygnum Capital to launch the $150M venture capital fund: E3 Low Carbon Economy Fund I. Africa is still at the mercy of climate change and needs resource-efficient and climate-resilient businesses to pave the way for service accessibility and economic development. At current, climate-smart businesses in Africa represent a nascent space for investment and require skilled, early-stage investors to support them in establishing commercial viability. The Fund's strategy is to leverage experience in energy investment, to deploy early stage capital to technologies enabled by energy that are digitized, decentralized, and decarbonized, and support access to essential services.
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