E3 Capital and Lion's Head Group have announced a first close for the E3 Low Carbon Economy Fund for Africa ("E3LCEF") at $48.1 million. The early-stage venture fund will focus on investing in next-generation low-carbon entrepreneurs in Africa scaling new technologies and business models enabled by the low carbon economy. The fund will invest in early-stage companies and hold significant capital for follow-on in later rounds. The fund has had its first close at $48.1 million and targets a second and final close of up to $100 million within 12 months.
E3 Capital and Lion’s Head combined forces to leverage their respective experience and footprint in Africa. E3 Capital also currently manages a €75 million fund (EAVF I) investing in decentralized energy businesses across Africa, with 15 investments in East-, West- and Southern Africa. Lion’s Head is an established emerging and frontier market focused asset manager with over $700 million under management and through a separate subsidiary provides corporate finance advisory services to governments, multilaterals, and private companies. Together, E3 and Lion’s Head have invested in more than $400 million in 30 African countries. E3LCEF is a Luxembourg domiciled fund for which Lion’s Head acts as AIFM and E3 Capital as Fund Adviser.
Recognising the importance of local knowledge in addition to international best practices, the investment team is based in Nairobi. The two parties are excited to leverage their deep experiences to contribute to the transition to a low carbon economy in Africa.
The fund is backed by KfW (in collaboration with BMZ, the German Ministry for Economic Cooperation and Development), FMO, the Dutch entrepreneurial development bank, Swedfund International AB (the Swedish development finance institution), and PROPARCO, with a final close targeting investors that share the belief in the innovative potential of vibrant African entrepreneurs and a commitment to an equitable and resilient global economy.
“We feel this is a great time to back low-carbon businesses in Africa which are starting to see potential for substantial scale. The E3 team brings unique expertise working with early-stage companies across the continent and have demonstrated this ability with their existing portfolio which is starting to show signs of clear winners.”– Clemens Calice, Lion’s Head CEO. “We are excited to back a new generation of entrepreneurs.”
“African businesses are starting to emerge with clear product market fit and a strong commercial potential at the core within the low carbon economy. The quality of entrepreneurs we are seeing is striking. We are passionate about helping African entrepreneurs build the next generation of innovative businesses that innovate, scale and impact the lives of all of us in the coming years.” – Paras Patel, Founder and Managing Partner of E3 Capital. “My partner, Vladmir Dugin, and I are grateful for the support we have received from our investors and look forward to engaging with many existing and new entrepreneurs in the coming months .”
Stephanie Lindemann-Kohrs, Director of the Equity Finance Department at KfW Development Bank, emphasized, "With its investment in the E3 Low Carbon Economy Fund I, KfW is investing as an anchor investor in the first fund of the newly formed E3 Capital team. We are pleased to have the E3 Management team together with Lions Head as very experienced partners with a long positive track record to drive the implementation of the funds' investment strategy. We are convinced that the investments of the Fund will make a significant contribution towards climate neutrality and climate justice in Africa”.
Linde Lassche, Investment Officer at FMO mentioned, “We are pleased to contribute to the next phase of the energy transition through anchoring the E3 Fund. The E3 team has a knowledge team on the ground with great networks across Africa. They have illustrated the capability to find talented entrepreneurs, either in new sector segments (one of the earliest investors in PAYGO solar and C&I in Africa) and/or in fragile states (Mali, Burkina Faso, Chad). Hence, they have been instrumental for innovation in the energy sector in Africa. Additionally, through three co-investments the E3 team has also proven to be a very good partner for FMO to execute on our direct VC strategy. We are excited to continue on this journey with them. ”
“Proparco is proud to support E3 LCEF, one of the very few pioneer investors in the early stage energy access and climate space in Africa. Through the FISEA mandate held by AFD, Proparco is a strong supporter of young African businesses that bring innovative solutions, amongst which in the low carbon space.” Natascha Korvinus, Sr. Investment Officer PROPARCO.
“Our commitment to the fund is driven by Swedfund’s focus on providing financing to companies that are active in high-impact sectors in the low carbon economy, such as renewable energy. Digitalization is another core focus for us, given the strong link with job creation and growth, and the intersection of digitalization and the low carbon transition in developing countries is of particular interest”, says Gunilla Nilsson, Investment Director Energy & Climate at Swedfund.
About E3 Capital
E3 Capital is a leading early-stage investment fund in Africa. With over 30 years of investment experience in Africa, E3 is uniquely positioned to take advantage of the emerging smart, distributed, cost-effective infrastructure market segment. E3’s strategy is to leverage experience in energy investment, deploy early-stage capital to technologies enabled by energy that are digitized, decentralized, and decarbonized, and support access to essential services. E3’s first fund, Energy Access Ventures Fund I (EAVF I), focuses on the energy infrastructure problem, backing early-stage companies that provide low-carbon and affordable solutions including power, internet and cooling, to businesses and individuals across Africa. EAVF I’s mission is to invest in companies that overcome this problem by scaling decentralized and digitized infrastructure across the continent. For more information, visit https://e3-cap.com/
About Lion’s Head Group
Lion’s Head is a frontier and emerging markets focused investment bank with two principal business lines: asset management and investment banking. The Firm manages ca. USD 750m of assets across 5 African funds with focus on renewable energy, decarbonisation, and capital markets. The banking business works in Africa, Middle East, and Asia, focusing primarily on energy transition, infrastructure, health, and sovereign finance. Lion’s Head has offices in London, Nairobi, Lagos, Dubai, Amsterdam and New York and employs ca. 60 professionals. For more information visit https://www.lhgp.com/
FMO is the Dutch entrepreneurial development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has a 50+ year proven track-record in empowering entrepreneurs to make local economies more inclusive, productive, resilient and sustainable. FMO focuses on three sectors that have high development impact: Agribusiness, Food & amp; Water, Energy, and Financial Institutions. With a total committed portfolio of EUR ~13 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. For more information please visit www.fmo.nl.
Proparco, a subsidiary of Agence Française de Développement Group, has been working with the private sector for over 45 years for a more just and sustainable world. With an international network of 23 local offices, Proparco works closely with its partners to build sustainable solutions in response to environmental and social challenges in Africa, the Middle East, Asia and Latin America. Proparco benefits from sector-based expertise as well as a wide range of financial solutions tailored to the different stages of business development, notably thanks to its Digital Africa subsidiary, and its Propulse technical assistance offering designed to scale up the impacts and performance of its partners. Proparco's new "Acting together for greater impact” Strategy 2023-2027 enables, strengthens and amplifies the different ways in which it works with its partners. To learn more: http://www.proparco.fr/en/strategy. For moreinformation, go to: http://www.proparco.fr/en and @Proparco LinkedIn
KfW is one of the world’s leading promotional banks. It was founded in 1948 and is 80% owned by the Federal Government of Germany and 20% by the German federal states. The business area KfW Development Bank carries out Financial Cooperation (FC) projects with developing countries and emerging economies on behalf of the German Federal Government. KfW Development Bank employs approximately 1,000 people at the head office in Frankfurt am Main and almost 400 specialists at more than 60 international locations, who cooperate with partners all over the world. Their goal is to combat poverty, secure peace, protect the environment and the climate as well as ensure fair globalisation. KfW is a competent and strategic adviser for current development policy issues.” For more information, visit https://www.kfw-entwicklungsbank.de/International-financing/KfW-Entwicklungsbank/
Swedfund is Sweden's development finance institution with the mission to contribute to poverty reduction through sustainable investments in developing countries. The investments in the private sector contribute to a growing number of jobs offering decent working conditions and increases access to essential products and services like electricity and healthcare. Climate and gender are themes that permeates our investment process. Swedfund invests in energy & climate, financial inclusion and increased access to capital for micro, small and medium-sized companies as well as healthcare and digitalization. Swedfund is part of Swedish development corporation, and measure and report all results. As a state-owned company, Swedfund is managed by the Ministry of Finance. Swedfund is financed through reflows from the portfolio and capital injections from the development assistance budget. The return from the portfolio finances our operations and were invest reflows from our portfolio in new projects, i.e. we recycle our capital injections. For more information, visit https://www.swedfund.se/en/
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