Finnfund invests USD 20m in Africa-focused clean energy fund

Finnish development finance company Finnfund has committed to invest USD 20 million (EUR 18.3m) into a pan-African equity fund which will mostly target investments in renewable energy platforms to facilitate Africa's energy transition to a net-zero energy mix.

Evolution III Fund is managed by Cape Town-based climate-centred private equity firm Inspired Evolution Managers Limited.

“This investment builds on several Finnfund’s strategic goals, such as making EUR 1 billion worth of new investment in climate finance by 2030 as well as maintaining our investment portfolio carbon net negative,” Riikka Molander, associate director and head of funds at Finnfund said in a statement earlier this week.

Finnfund’s commitment comes as part of the first closing of the fund which took place at the beginning of March.

Evolution III attracted USD 199.4 million in conditional commitments which gives it 12 to 18 additional months to reach its targeted hard cap of USD 400 million. It is currently backed by seven international investors -- European Investment Bank (EIB), the Dutch Development Bank FMO, the African Development Bank (AfDB), the Emerging Markets Climate Action Fund (EMCAF), Swedfund International AG, the Swiss Investment Fund for Emerging Markets (SIFEM) and the Finnish Fund for Industrial Cooperation (FinnFund).

Inspired Evolution’s third fund will seek to invest in traditional utility-scale, grid-connected IPP platforms and projects, decentralised commercial and industrial (C&I) private offtake opportunities, off-grid solutions and energy-as-a-service (EaaS) micro-grid infrastructure-type offerings, among others.

The fund manager, established in 2007, has so far been involved in financing the development and operations of more than 2 GW of renewable energy infrastructure-type generation projects and various growth equity investments across sub-Saharan Africa.

(USD 1 = EUR 0.916)

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