African Development Bank Group approves $32.5 million equity investment in Climate Investor One’s Construction Equity Fund

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The Board of Directors of the African Development Bank Group have approved a $32.5 million equity investment in Climate Investor One’s (CIO) Construction Equity Fund (CEF).

CEF is a platform that uses a unique blended finance approach, and targets the entire asset lifecycle to deliver viable renewable energy projects to the market.

A statement released by the African Development Bank said CIO will provide capital and technical assistance for early stage project development to ensure that bankable energy projects are delivered to the market; invest equity for the construction of projects; and provide debt at competitive terms.

The Bank’s investment in CEF will be managed by Climate Fund Managers (CFM), a joint venture between Netherlands Development Finance Company (FMO) and Sanlam InfraWorks. The CEF’s focus on investing in early stage project development will also assure the timely implementation of well-prepared projects.

Amadou Hott, the African Development Bank’s Vice President for Power, Energy, Climate Change and Green Growth, who spoke at the board meeting, said “significant investments are required to close the infrastructure gap and meet energy access goals. The Bank’s investment in the Fund will complement its operations in the energy sector, and unlock at least an additional $40 million dollars of investments into Africa. With nearly 600 million Africans without access to energy, there is a huge market for the Fund to invest and generate a return for its investors”.

The African Development Bank’s Director of Energy Financial Solutions, Policy & Regulation, Wale Shonibare noted that the Bank would be playing a key role as knowledge repository for Africa. He said “enabling CFM to better gauge investment opportunities while ensuring that the highest environmental and social standards are applied to the CEF’s projects”.

Climate Investor One aligns with the African Development Bank’s New Deal on Energy and the High 5 priorities to ‘Light up and Power Africa’, and ‘Improve the quality of lives of Africans’.

The Construction Equity Fund will have a measurable social and environmental impact by supporting the establishment of clean energy projects in developing markets, by creating jobs and providing access to electricity in an under-developed market.

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