London, UK - 15 November 2024 – British International Investment (BII), the UK's development finance institution and impact investor, today announced a USD 16 million commitment to the Africa Go Green Fund (AGG), managed by Cygnum Capital Asset Management, to advance climate resilience in Africa.
Having raised over USD 166 million at final close, the fund will expand access to finance for climate-friendly projects, such as purchasing high-efficiency appliances and industrial equipment, retrofitting existing buildings, constructing new green buildings, investing in the growth of electric mobility vehicles and infrastructure, and installing battery storage for residential, commercial, and industrial consumers.
Africa remains highly vulnerable to climate change, with nine out of the 10 most vulnerable countries globally located on the continent. It requires $2.5trillion[1] of climate finance between 2020 and 2030, with mitigation accounting for 66% of total climate finance needs. This leaves a significant financing gap. The gap is even more pronounced in nascent climate sub-sectors such as energy efficiency, green buildings, electric vehicles and clean cooking.
Despite their crucial roles in supporting the energy transition, these sub-sectors are often underserved by traditional lenders due to perceived risks, unproven business models, limited scale, and less advanced regulatory environments in developing countries. AGG aims to demonstrate the commercial viability and credit-worthiness of these critical sub-sectors by creating a more operational track record to catalyse further private investment.
Since becoming fully operational in 2021, AGG has provided financing to several pan-African clean energy platforms, including Solarise and Burn Manufacturing, to accelerate access to clean energy and cooking solutions for millions of Africans. Other notable investments include AktivCo, a telecoms Energy Services Company (ESCO) that is expanding clean energy solutions for telecoms infrastructure in Burkina Faso, Cameroon, Chad, Côte d'Ivoire, Nigeria and Senegal; M-Kopa, an asset financing platform that provides underbanked customers in Africa access to essential products including solar lighting, televisions, fridges, smartphones and financial service; and Ampersand, which is scaling electric motorbikes and charging infrastructure across Rwanda and Kenya.
[1] Climate Policy Initiative: Climate Finance Needs of African Countries
