The fund, which focuses on boosting access to solar power across sub-Saharan Africa, was backed by a range of private investors and development finance institutions.

The Afrigreen Debt Impact Fund reached a final close after it hit its €100m fundraising target.

The fund, which is jointly managed by Rgreen Invest, a Paris-based asset manager with €2.5bn under management, and Echosys Invest, provides long-term debt solutions for the installation of solar and small-size utility scale solar power plants in Africa.

The new fund was supported by the European Investment Bank, the International Finance Corporation, Dutch entrepreneurial development bank FMO, French development agency Proparco and BIO, the Belgian investment company for developing countries. Private investors included French lenders Société Générale and BNP Paribas.

“Afrigreen’s initial investments have confirmed the growing demand for capital among project developers and operators who are successfully persuading commercial and industrial companies in Africa to transition to solar power through power purchase agreements,” said Olivier Leruste, co-founder and CEO of Echosys Invest, a joint venture between Rgreen Invest and Echosys Advisory, which was created to structure and advise Afrigreen on its investment strategy.

There is currently “a significant pipeline” of small-scale utility-scale projects that are ready to connect to national grids without the need for major transmission upgrades, Leruste said. “With the right project finance solutions implemented swiftly and pragmatically, construction can begin immediately,” he added.

Forced labour checks

The new fund is targeting between 15 to 20 projects and portfolios of projects, with an average investment period of up to a decade and commitments of up to €15m per ticket. To date, it has made six investments in Nigeria, Morocco and Botswana.

The new fund, which is classified as Article 9 under SFDR regulation, aims to support UN SDG 7: Clean and Affordable Energy, SDG 9: Industry and Infrastructure, SDG 12: Responsible Consumption and Production and SDG 13: Action on Climate Change.

Nicolas Rochon, founder and CEO of Rgreen Invest, said the final close represented “a major milestone” for his firm as well as for energy transition financing in Africa.

Working with a wide range of development finance institutions has led to Afrigreen applying high ESG and impact standards for all its projects, according to Rochon.

In practice, this means Afrigreen will audit all of its projects on social and environmental impact, with extra attention being paid to the risk of forced labour in the production and installation of solar photovoltaic panels and their components.