Swedfund commits MEUR 15 to finance renewable energy in Africa

Swedish development finance institution Swedfund commits MEUR 15 to Africa Renewable Energy Fund II (“AREF II”) to finance the build-out of renewable energy projects in a sustainable way. AREF II will invest in Sub-Saharan Africa and has a strong focus on least developed countries and an investment strategy that includes Angola, Cameroon, Kenya, Madagascar, Malawi and Uganda. The technology focus will mainly be small- and medium-sized run-of-river hydropower projects complemented with solar, wind and battery storage solutions.

- There is a vast untapped potential for hydropower in Sub-Saharan Africa to increase the access and reliability of electricity supply and to support countries in reaching their climate goals, says Maria Håkansson CEO of Swedfund.

Run-of-river hydropower is a type of technology which uses the natural downward flow of rivers and requires almost no water retention compared to large-scale hydropower that uses dams to store water. This minimizes the impact on the surrounding environment and nearby communities, while also providing a reliable supply of clean electricity to the national grid.

- We have a strong focus to support renewable energy developers, such as Berkeley Energy, who have the competence and experience to structure projects and take them from development to operations. By contributing capital in the first close of AREF II, especially when the COVID-19 pandemic has increased capital raising risks for fund managers, we hope to mobilize private capital from commercial investors in the subsequent closes, says Maria Håkansson CEO of Swedfund.

AREF II is Berkeley Energy’s second Africa-focused renewable energy fund and has an advanced pipeline of greenfield renewable energy projects in Sub-Saharan Africa. Swedfund invested in Berkeley Energy’s Asian fund REAF II in 2017.