French fund manager RGreen Invest and investment advisor Echosys Invest have announced the first closing of their new fund, the Afrigreen Debt Impact Fund, raising €87.5m out of a final target of €100m.
The cash raised will be used to finance on-and off-grid solar power plants for small and medium-sized commercial and industrial consumers in Africa.
“Africa boasts 39% of the world’s total renewable potential, and yet investment in renewable energy has been lagging behind, for a set of reasons that includes the lack of suitable financial instruments, which especially affects the most dynamic segment of the market, commercial and industrial solar users,” said president of Echosys Invest Olivier Leruste.
Afrigreen will help bridge the African renewable energy funding gap through direct lending and asset-based debt facilities for regional and international developers as well as commercial and industrial companies to develop solar photovoltaic energy infrastructure across Africa, with a particular focus on West and Central Africa.
The fund will also be able to offer long-term currency financing in Ghana and Nigeria with support from the International Development Association’s Private Sector Window Local Currency Facility. This is expected to significantly reduce the foreign exchange risk and materially increase the Afrigreen’s competitiveness.