Grace Ashiru
To enhance mobility and environmental sustainability in Latin America, FSD Africa Investments (FSDAi) has forged a significant alliance with the ride-hailing service InDrive.
Recognizing the increasing demands of office communication in the era of remote and hybrid work, FSD Africa Investments (FSDAi) has declared its commitment to invest $19.5 million. This investment is geared towards backing infrastructure initiatives in Africa that are both in harmony with the climate and adaptive to its changes, thereby fortifying the continent’s resilience against climate adversities.
FSDAi’s investments in Acre Impact Capital’s Export Finance Fund I, the Catalyst Fund, and Camco’s Spark Energy Services underscore the institution’s commitment to collaborating with local investment managers and venture capitalists. The goal is to champion environmentally-conscious enterprises that might otherwise face challenges securing the necessary capital.
Key investment details include:
-Acre Impact Capital’s Export Finance Fund I**: FSDAi is investing US$12 million. This fund primarily addresses the gap in commercial debt financing for eco-friendly infrastructure projects backed by official Export Credit Agencies (ECAs). ECAs’ financing reduces debt expenses, making infrastructure projects more viable. However, to leverage ECA backing, project initiators must front about 15% of the project’s value using commercial debt, which is becoming rarer. FSDAi’s involvement with Acre will catalyze the influx of ECA finance for green and social infrastructure, mobilizing an additional US$ 67 million directly tied to FSDAi’s investment. This will enhance access to vital services for over half a million individuals and create over 2,000 employment opportunities.
-Catalyst Fund FSDAi is allocating US$4.5 million to this pre-seed venture capital fund and accelerator. The fund’s mission is to invest in and provide intensive venture-building assistance to tech startups focused on bolstering the resilience of African communities vulnerable to climate change. This investment aims to validate venture building as a viable model to expedite the growth of eco-friendly businesses in Africa. The target is establishing or accelerating 40 enterprises, aiding 5 million individuals and families in adapting to climate change repercussions.
-Spark Energy Services (Spark): Managed by the climate and impact fund manager Camco, FSDAi is directing US$3 million into Spark. This platform is innovatively designed to consolidate smaller-scale projects, minimizing transaction expenses and diversifying risks. FSDAi’s commitment to Spark will champion a just transition, yielding local development benefits. This includes facilitating a reduction of 0.61m MtCO2e in greenhouse gas emissions, collaborating with local developers, generating 1,400 jobs, and supplying affordable, reliable, and green energy to small and medium-sized commercial and industrial entities.
FSDAi’s overarching objective is to amplify the influence of finance in Africa’s eco-friendly economic progression by investing in pioneering financial tools, infrastructures, and intermediaries. The United Kingdom’s Foreign, Commonwealth & Development Office (FCDO) is the primary funding source for this initiative.
