The Africa Go Green Fund announces an interim close to reach an AUM of $150M to advance climate resilience in Africa
14 November2023 - The Africa Go Green Fund (AGGF), managed by Cygnum Capital Asset Management, which invests in projects in Sub-Saharan Africa that reduce greenhouse gas emissions, has made headlines today with the announcementof its successful interim close helped by an investment from the Clean Technology Fund (“CTF”) of the Climate Investment Funds (CIF), for which the African Development Bank is an implementing entity.
The CTF funding totaling $12 million in equity will further allow AGGF to broaden its financing for climate-friendly projects in Africa, including purchasing high-efficiency appliances and industrial equipment, retrofitting existing buildings and new green buildings, and installing rooftop solar and battery storage for residential, commercial, and industrial consumers.
Launched by KfW, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) in early 2021, and managed by Cygnum Capital, AGGF is the first structured debt fund in Africa focused on energy efficiency solutions. The fund’s target size is between $230 million and $250 million. The current fundraising round, standing at $150 million, demonstrates that the fund has full traction to reach its target size. Other investors include the International Finance Corporation (IFC), the African Development Bank, the Nordic Development Fund (NDF), and the Sustainable Energy Fund for Africa (SEFA). An additional $10 million in debt from Calvert Impact Capital was closed in December 2022.
AGGF is supported by a technical assistance facility of $3.3 million provided by KfW on behalf of BMZ, which supports project development and market studies, and provides transaction advisory services and capacity building to stakeholders.
Fully operational since 2021, AGGF has provided financing to AktivCo, a telecom energy services company, to develop clean energy solutions for powering telecommunication towers in Burkina Faso, Cameroon, Chad, Côte d'Ivoire, Niger and Senegal; BBOXX, a pay-as-you-go solar-powered solutions provider, to accelerate access to clean cooking solutions for millions of Africans; Solarise, for energy-efficient appliances in Kenya, South Africa and Mauritius; and M-Kopa, an asset financing platform that provides underbanked customers in Africa access to essential products including solar lighting, televisions, fridges, smartphones and financial services.
“Power sector priorities in Sub-Saharan Africa have traditionally focused on increasing generation capacity, rather than using the existing capacity more efficiently. This approach tends to create energy intensive economies. Under the African Development Bank’s Climate Change and Green Growth Framework, we are putting more efforts into developing and financing energy efficiency projects, with the support of our climate finance partners such as the CTF. We are cognizant that this intervention in AGGF will support economic growth of African countries whilst helping to curb the increase in energy demand” said Gareth Phillips, Manager of Climate and Environment Finance at the African Development Bank.
“We are extremely pleased to welcome CTF to AGGF. We see an incredibly exciting and diverse opportunity set of energy efficiency opportunities across Africa. AGG is incredibly well positioned to push the boundaries of climate finance across the continent” Clemens Calice, CEO of Cygnum Capital.
ABOUT CYGNUM CAPITAL ASSET MANAGEMENT (formerly Lion's Head Global Partners)
Cygnum Capital Group is an investment bank and asset manager operating across frontier and emerging markets. Formerly known as Lion’s Head, which was founded in 2008, Cygnum Capital is now a global provider of tailored and innovative financial solutions to meet its clients’ diverse needs.
Cygnum Capital uses long-term relationships, networks and local market understanding to deliver a best-in-class service. With offices in London, Nairobi, Lagos, Dubai, and Amsterdam, Cygnum Capital’s dynamic team of 75 finance professionals provide deep sectoral expertise, a broad product offering, an asset management platform and the ability to leverage synergies between our corporate finance, asset management and advisory activities.
Cygnum Capital Asset Management manages five pioneering funds: four debt funds including: (i) the African Local Currency Bond Fund (“ALCBF”), a ground-breaking investment vehicle established to support local currency capital markets, (ii) Off-Grid Energy Access Fund (“OGEF”) which supports companies in off grid energy such as SHS and small- medium mini-grids, (iii) Facility for Energy Inclusion(“FEI”) which support companies that provide a range of renewable energy solutions such as medium - large mini- grids, C&I and IPP with a maximum capacity of 25 MW, (iv) AfricaGoGreen (“AGG”) Fund which supports companies combating climate change by reducing the use of fossil fuels through new technologies and that increase energy efficiency; and (v) a VC private equity fund E3 Low Carbon Economy Fund for Africa (“E3 LCEF”) which invests inclimate-smart services, digital connectivity & Applications, low-carbon productivity enablers. Cygnum Capital Asset Management has over USD 750 million of assets under management with investments in more than 34 African countries.
ABOUT THE CLEAN TECHNOLOGY FUND (CTF)
The CTF is one of the Funds under the Climate Investment Funds (CIF). It promotes scaled-up financing for demonstration, deployment, and transfer of low-carbon technologies with significant potential for long-term greenhouse gas emissions savings. The African Development Bank became an Implementing Entity of the CTF in 2010 and since then has approved over $723 million in CTF resources for a total of 14 projects across Africa.