Home Startups AfricaGoGreen Fund raises $87 million to Advance Climate Resilience in Africa

AfricaGoGreen Fund raises $87 million to Advance Climate Resilience in Africa

by James Musoba
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The AfricaGoGreen Fund (AGGF), which invests in projects in Africa that mitigate or reduce greenhouse gas emissions, has received $87 million ($47 million in equity and $40 million in debt) to broaden its financing for climate-friendly projects in Africa.

This is the second AGGF fundraising close and was led by IFC, the African Development Bank, the Nordic Development Fund, the Sustainable Energy Fund for Africa and Calvert Impact Investments. AGGF will use the funds to purchase 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.

According to Henrik Elschner Pedersen, IFC Regional Industry Director in Africa for Manufacturing, Agribusiness, and Services, “IFC is partnering with AfricaGoGreen because its innovative energy efficiency-focus is making critical capital available to businesses that are supporting the region’s energy transformation while also expanding access to electricity, green building, and e-mobility solutions.”

IFC provided $17 million in equity, $30 million in debt to the fund. The African Development Bank, the Nordic Development Fund, and the Sustainable Energy Fund for Africa each invested $10 million equity in the fund. An additional $10 million in debt from Calvert Impact Capital was closed in December 2022.

AGGF is the first structured debt fund in Africa focused on energy efficiency solutions. The fund targets reaching between $230 million and $250 million at final close. With the current fundraising round, total funding stands at $138 million, demonstrating that the fund is getting traction to reach its full scale. 

AGGF is accompanied 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 and capacity building to stakeholders.

Fully operational since 2021, AGGF has provided financing to AktivCo, a telecom tower distributed generation energy services company, to develop clean energy solutions for powering telecommunication towers in Burkina Faso, Cameroon, Chad, Côte d’Ivoire and Niger, and to BBOXX, a pay-as-you-go solar-powered solutions provider, to accelerate access to clean cooking solutions for millions of Africans. AGGF has also more recently closed the Solarise transaction investing in energy efficient appliances in Kenya, South Africa and Mauritius, and upsized both the AktivCo and BBOXX transactions.

“KfW is glad to welcome the new investors to the AfricaGoGreen Fund, which was initiated with seed capital from the German Government. We hope that other investors will follow suit. This successful second round of fundraising shows that the fund is on track to play a critical role in Africa’s just energy transition,” said Johannes Scholl, Head of Division at KfW.

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