The International Finance Corporation (IFC), a member of the World Bank Group focused on the private sector, has formally disclosed a proposed equity investment of up to $25 million in the African Transition Acceleration Fund (ATAF). This strategic fund is advised by African Infrastructure Investment Managers (AIIM), a major player in African infrastructure equity investment.
Fund’s Purpose and Strategic Focus
The primary objective of the African Transition Acceleration Fund is to supply crucial early-stage capital needed to accelerate the development of energy transition businesses and supportive ecosystems across the African continent. This investment aims to foster growth in innovative companies and technologies that will drive Africa’s shift toward a cleaner, more sustainable energy future.
ATAF’s investment strategy is concentrated across three strategic and interconnected verticals that are key to the global energy transition:
- Clean Electrons: This vertical focuses on generation, transmission, and distribution of renewable and low-carbon electricity, including solar, wind, hydro, and associated grid infrastructure and smart technologies.
- Clean Molecules: This involves investments in non-fossil fuel-based energy carriers, such as green hydrogen, ammonia, and biofuels, which are essential for decarbonizing hard-to-abate sectors.
- Sustainable Transport: This area targets the transition toward lower-emissions mobility solutions, including electric vehicle (EV) infrastructure, battery storage, and public transit systems.
Fund Size and Geographic Scope
The African Transition Acceleration Fund is targeting substantial capital mobilization, with a total committed capital target of $200 million. The fund has also set a hard cap of $250 million, indicating the maximum size it will seek to raise.
Once established, ATAF will deploy its capital by making targeted investments in a diverse range of companies and projects located in various countries across the African continent, reflecting a pan-African approach to driving the energy transition. The IFC’s investment underscores its commitment to supporting sustainable infrastructure and climate-resilient growth in developing economies.
