The African Renewable Energy Fund (AREF), which focuses on renewable energy projects in Sub-Saharan Africa, reached a first close yesterday, as it raised $100 million to invest in small- to medium-sized independent power producers.
The fund will support development stage renewables projects including hydro, wind, geothermal, solar, biomass and waste gas.
The fund will be run out of Nairobi and plans to attract a further $100 million by final close. It will aim to target IPPs with between 5MW and 50 MW of capacity, making commitments per project between $10 million and $30 million.
The fund will have the capacity to source further funding from co-investors, where necessary, for a larger investment.
AREF was promoted by the African Development Bank and the African Biofuel and Renewable Energy Company (Abrec). The biggest sponsor of the fund is the Africa Development Bank, investing $65 million.
Other investors include the West African Development Bank, Dutch development bank FMO, West African development bank Ecowas and the US-based investor/charity the Calvert Foundation.
The fund will be managed by Berkeley Energy, a Mauritius-based firm specialising in the emerging markets of Asia and Africa, which is to open a headquarters in Nairobi and an office in West Africa.
Thierno Bocar Tall, CEO of Abrec, another investor in the fund, described it as a "milestone for realising the potential of renewable energy in Sub-Saharan markets."
Sophie Robinson-Tillett
