The African Development Bank Group (AfDB) has announced its decision to allocate a $10 million junior equity investment from the Sustainable Energy Fund for Africa (SEFA) to the KawiSafi II Fund. This strategic investment aims to bolster local enterprises that are actively involved in developing and scaling up projects with a strong emphasis on climate change mitigation, particularly those that serve the needs of marginalized communities.
This financial commitment was sanctioned by the AfDB’s Board of Directors and will be sourced from SEFA, a specialized fund that the AfDB administers. The fund is dedicated to promoting sustainable energy initiatives across the African continent.
Amar Inamdar, who holds the position of Managing Director at KawiSafi Ventures, expressed his view that the AfDB’s investment plays a pivotal role in enabling the fund to achieve its initial capitalization milestone. He emphasized that this investment is instrumental in drawing additional capital that is essential for backing African entrepreneurs who are at the forefront of combating climate change. These entrepreneurs are focusing their efforts on renewable energy solutions, advancing clean transportation, and other critical areas that are integral to achieving climate objectives.
João Duarte Cunha, who manages the Renewable Energy Funds Division within the Bank Group, highlighted the significance of the KawiSafi Fund II. He pointed out that the fund is a vital source of venture and growth capital for companies that are navigating the energy access and transition landscape at a particularly crucial juncture.
The KawiSafi Fund II, which is the successor to the initial KawiSafi Fund I, has a total capitalization of $200 million. It is specifically designed to target initiatives that are geared towards the energy transition, enhancing productivity, and improving mobility and logistics within the sub-Saharan African region. Additionally, the fund has earmarked a $10 million provision specifically for managing climate impact and environmental, social, and governance (ESG) risks.
Established in 2016 with a capital of $67 million, the KawiSafi Fund I is an off-grid energy investment fund that has received backing from the Acumen Fund. This fund has made strategic investments in several companies that are at the forefront of providing off-grid energy solutions, including d.light, Bboxx, and BioLite.
d.light is a company that specializes in offering solar energy solutions to off-grid communities. In a significant move to expand its operations, d.light recently completed the arrangement of a securitization multi-currency facility in July. This financial arrangement is designed to purchase receivables worth $176 million across Kenya, Tanzania, and Uganda. The objective of this facility is to enhance d.light’s PayGo consumer finance offerings, which will, in turn, enable an estimated six million individuals in these three countries to gain access to renewable energy sources within the next three years.
Bboxx, another prominent entity in the clean energy domain, has transitioned its corporate headquarters from London to Kigali, Rwanda. The company has set an ambitious target to impact the lives of 36 million people by the year 2028. This strategic relocation is part of Bboxx’s growth trajectory, which has been bolstered by a $100 million partnership with the Kuwaiti investment firm EnerTech. This collaboration is aimed at broadening the reach of clean energy solutions, as well as promoting clean cooking technologies, smartphones, smart financing options, and e-mobility products.
Beyond the investments in KawiSafi Fund I, the African Development Bank (AfDB) is preparing to make an additional investment of $10.5 million in January 2024. This investment will be directed to the Seedstars Africa Ventures I fund. The primary goal of this investment is to nurture high-growth innovative businesses across the African continent. It is intended to serve as a catalyst to attract further capital, expand the fund’s footprint throughout Africa, and draw in other investors who are keen on supporting the burgeoning innovation ecosystem on the continent.
