The African Development Bank Group (AfDB) has approved a $10 million junior equity investment in the KawiSafi II Fund, aimed at empowering climate-focused startups across Africa so that those startups focused on investing in climate-related projects in vulnerable communities.
The funding/investment was allocated by the Bank's BOD and will be sourced from the Sustainable Energy Fund for Africa (SEFA). The SEFA is a financing company owned and managed by AFDB. The Investment is part of AfDB's broader strategy to support youth-led initiatives and innovative businesses that can drive economic growth and job creation while addressing significant market challenges in the African regions.
The KawiSafi Fund II is a $200 million venture equity fund which and it's focused on supporting companies that deliver clean and green energy solutions to low-income populations in East Africa, particularly in Kenya and Rwanda. The fund also aims to create significant social and environmental impacts, such as improving energy access and reducing the carbon emissions causing air pollution.
Amar Inamdar, Managing Director of KawiSafi Ventures, made it cleared the catalytic nature of the African Development Bank's $10 million investment, which has been instrumental in enhancing the fund reach its initial end and attracting additional capital to help Africa’s climate innovators.
The AfDB's investment is anticipated to greatly enhance funding for innovative African startups addressing climate change through renewable energy, clean mobility, and other essential sectors.
João Duarte Cunha, Manager of the Bank Group’s Renewable Energy Funds Division, highlighted that KawiSafi Fund II offers essential venture and growth capital to companies and organizations involved in energy access and transition during a crucial period.
The fund, which follows the success of KawiSafi Fund I, targets key areas like energy transition, productivity, mobility, and logistics in sub-Saharan Africa and includes a $10 million facility dedicated to climate impact and ESG risk management.
Launched in 2016 with $67 million and backed by Acumen Fund, KawiSafi Fund I has made impactful investments in companies like d.light, Bboxx, and BioLite, all dedicated to off-grid energy solutions.
However, note that d.light, the affordable solar energy solutions provider in Nigeria, recently secured a $176 million facility to expand its PayGo consumer finance offering, enabling six million people in Kenya, Tanzania, and Uganda to access renewable energy over the next three years. Meanwhile, Bboxx, another major player, has moved its headquarters to Kigali, Rwanda, with the goal of reaching 36 million people by 2028, bolstered by a $100 million partnership with EnerTech.
Following the success of KawiSafi Fund I, which has positively impacted over 126 million lives and prevented around 31 million tons of CO2 emissions, the African Development Bank (AfDB) will invest $10 million in KawiSafi Fund II. This new fund is positioned to further advance innovation in Africa's climate tech ecosystem.
In January 2024, the AfDB will also commit $10.5 million to the Seedstars Africa Ventures I fund to support high-growth innovative businesses across Africa, further increasing the continent's access to capital and clean energy solutions.
