Swedfund continues to focus on renewable energy in Sub-Saharan Africa

Swedfund, Sweden’s development finance institution, invests 13 MUSD in the fund Frontier Energy II. The fund focuses on small and medium-sized renewable energy projects, primarily in East Africa.

Clean, reliable and affordable electricity is one of the fundamental drivers for development. It underpins economic growth and is central to a number of other issues ranging from climate change to a more equitable distribution of income and the empowerment of women. Meanwhile, roughly 600 million people in Sub-Saharan Africa lack access to sustainable electricity.

This is why Swedfund is prioritising investments that contribute to increasing the production of clean energy in developing countries. Swedfund committed MUSD 13 to Frontier Energy II Alpha K/S, which will focus on developing, constructing, operating and owning small- and medium-sized renewable energy projects in Sub-Saharan Africa.

The Fund is expected to focus particularly on wind, solar, hydro and geothermal projects located in East Africa including Kenya, Uganda, Tanzania and Rwanda. Countries in the region have material deficits in terms of electricity production capacity, coupled with a substantial level of unused potential renewable resources. A competitive relative cost position underpins the attractiveness of new renewable energy investments, while these investments also help advance a socially and environmentally sustainable growth pattern.

“Swedfund is committed to being a progressive climate investor and to help fulfil the Swedish Government’s ambitions to support green and inclusive growth in developing countries. We are excited about enabling the expansion of renewable energy in sub-Saharan Africa by investing in the Frontier fund,” said Anna Ryott, Managing Director at Swedfund.

The Fund is a successor fund to the DI Frontier Market Energy & Carbon Fund (see http://www.frontier.dk/fund) Total commitments in this first close amounts to MUSD 116. In addition to Swedfund, commitments were made by other development finance institutions and a handful of smaller private investors.