Sylvia Duruson
The African Development Bank Group (AfDB) has announced a significant investment of $10 million in the KawiSafi II Fund, aimed at supporting local businesses in developing and expanding climate-focused projects for vulnerable communities. This investment, approved by the Bank’s Board of Directors, will be sourced from the Sustainable Energy Fund for Africa (SEFA), a financing facility under AfDB management.
KawiSafi Ventures’ Managing Director, Amar Inamdar, emphasized the catalytic nature of AfDB’s investment. He highlighted its importance in helping the fund reach its initial close and attracting essential capital to support Africa’s climate innovators. The investment is expected to accelerate funding for innovative African start-ups addressing climate change through renewable energy, clean mobility, and other crucial sectors vital to achieving climate goals.
João Duarte Cunha, Manager of the Bank Group’s Renewable Energy Funds Division, underscored the critical timing of this investment. He noted that KawiSafi Fund II provides essential venture and growth capital to businesses in energy access and transition during a pivotal period.
The KawiSafi II Fund, with a target of $200 million, is the successor to KawiSafi Fund I. It focuses on energy transition, productivity, mobility, and logistics in sub-Saharan Africa. The fund includes a dedicated $10 million facility for climate impact and ESG risk management. Its predecessor, KawiSafi Fund I, was established in 2016 with $67 million, backed by Acumen Fund, and has invested in companies such as d.light, Bboxx, and BioLite.
d.light, a provider of off-grid solar solutions, recently secured a multi-currency securitization facility to purchase $176 million of receivables across Kenya, Tanzania, and Uganda. This development will enable the company to scale up its PayGo consumer finance offering, potentially providing renewable energy access to six million people in these countries over the next three years.
Bboxx, another key player in the clean energy sector, has made strategic moves by relocating its headquarters from London to Kigali, Rwanda. The company aims to reach 36 million people by 2028, bolstered by a $100 million partnership with Kuwaiti investment firm EnerTech. This collaboration will facilitate the expansion of clean energy, clean cooking, smartphones, smart financing, and e-mobility products.
In a related development, the AfDB has committed to investing $10.5 million in the Seedstars Africa Ventures I fund in January 2024. This investment is designed to support high-growth innovative businesses, attract additional capital, and expand the fund’s presence across Africa while encouraging participation from other investors.
These investments by the AfDB demonstrate a strong commitment to fostering climate innovation and sustainable development across Africa. By supporting funds like KawiSafi II and Seedstars Africa Ventures I, the Bank is playing a crucial role in channelling resources to local businesses and start-ups that are at the forefront of addressing climate challenges and promoting renewable energy solutions in vulnerable communities.
