3 SOURCES OF CLEAN(ER) ENERGY FINANCE IN AFRICA

We are in a new era of energy production, exploration and innovation in Africa. Oil exploration is happening in many parts of the continent and production has begun in Ghana and other countries in West and East Africa. But there is growing investor interest in cleaner energy sources. For example:

  • Ten African clean energy startups gave presentations to The West Africa Forum for Clean Energy Financing. The startups were winners of a business plan competition held in March of this year by the Climate Technology Initiative Private Financing Advisory Network. The plan was a collaboration with ECOWAS and the Sustainable Energy Fund for Africa. These organizations are positioned to fund startups and small scale projects. http://allafrica.com/stories/201310280618.html
  • The African Renewable Energy Fund (AREF) is a private equity fund targeting small to mid sized energy projects in Sub-Saharan Africa. AfDB has contributed $25 million and an additional $39.5 million will come from partner organizations including the Sustainable Energy Fund for Africa ($25 million, to the main fund and $10 million to the Project Support Facility), and the Global Environment Facility ($4.5 million). The targeted fund size is $150-200 million. AREF is managed by Berkeley Energy. The fund will support several AfDB initiatives including the Climate Change Action Plan for 2011-2015.

    http://allafrica.com/stories/201311131489.html

  • Sovereign wealth funds are making enormous investments in energy. For example, the Temesek Fund of Singapore has acquired a $1.3 billion liquified natural gas block. The block was bought from Ophir Energy of the UK, indicating that sovereign wealth funds in addition to funding large projects could provide an exit for earlier stage investors. While not a direct investment in an African owned entity, the deal does signal a level of confidence in an asset in Tanzania. If fact 10% of the fund is allocated to investments in the developing world outside Asia, implying a potentially large chunk going to Africa.

    http://www.forbes.com/sites/chriswright/2013/11/19/temaseks-africa-investment-a-sign-of-the-future-for-sovereign-wealth-funds/.Upgq0yjKevU.twitter

Energy entrepreneurs should give serious consideration to starting or supporting projects in Africa. The need has been there for a long time. Now capital, management and technical assistance, and other resources are becoming available.

 

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