3 March 2017 – Five new partners joined UN Environment's Seed Assistance Facility today, committing to invest $50 million in clean power projects in Sub-Saharan Africa and Asia.
In a region like sub-Saharan Africa where, 600 million people lack access to electricity, clean energy has the potential to greatly improve quality of life, economic development and environmental sustainability. The good news is that developing nations are investing more in renewable energy. Global investment in renewables hit $285.9 billion in 2015, but more remains to be done to satisfy the needs of growing populations.
Entrepreneurs have the power to transform markets, but if they cannot even get started, change is blocked. This is why seed capital is so important. In clean energy, start-up costs can be modest, but they are often perceived as too risky to attract third-party financing. Under-capitalized developers and entrepreneurs often lack business development skills and are unable to bring their ventures to operation, restraining the progress of their countries towards low-carbon development.
The Seed Capital Assistance Facility helps managers of private equity funds and development companies provide that necessary seed financing and enterprise assistance to early-stage clean energy project developers and entrepreneurs, filling the gap between the “lack of bankable projects” and available finance.
The second phase of the Facility began last year and five new agreements have already been signed with fund managers engaged in clean energy projects in Asia and sub-Saharan Africa.
DI Frontier Market Energy, Carbon Fund and JCM Clean Development Fund have received support for strengthening of their renewable energy projects in sub-Saharan Africa. They recently received co‑funding support for the development of a 10 megawatt (initial phase) geothermal project in Kenya, a 12 megawatt hydro project in Uganda, and an 80 megawatt solar project in Northern Nigeria.
In Asia, windfarm project developer The Blue Circle received co-funding support for the development of three projects in Vietnam, Cambodia and Indonesia, markets where wind production is still in its infancy. Olivier Duguet, CEO of The Blue Circle, said the Facility was “a great instrument that helps us seize opportunities we would otherwise find difficult to take. SCAF provides adequate support to bake our ventures in promising but rather untapped frontier markets.”
Zoscales Partners received support for the establishment of the East Africa Growth Equity Fund, an Ethiopian fund for small and medium-sized enterprises with a focus on resource efficiency. “Small and Medium Enterprises belong to Africa’s most important private sector participants. Through the financial support from SCAF we can overcome liquidity constraints during the fundraising period and once operational help our investee companies reduce environmental footprint.” said Jacop B. Rentschler, Managing Partner of Zoscales.
GreenWish Partners will develop on- and off-grid renewable energy projects in Western Africa. The company recently inaugurated its first project, the 20 megawatt Senergy photovoltaic plant in Northern Senegal. Charlotte Aubin-Kalaidjian, Chief Executive of GreenWish Partners said “SCAF helps us to leverage West Africa’s vast renewable energy potential. The support of our projects does not only facilitate access to clean electricity, it also eases new business opportunities, especially in rural areas.”
The five funds that have so far partnered with the Facility in this phase are aiming for a total capitalization of more than $363 million, of which nearly $35 million will go to seed investing. The Facility will provide $15 million of additional support to help transfer this early-stage support to clean-energy entrepreneurs, and ultimately to advance the Paris Agreement’s target of keeping the global temperature rise this century below 2 degrees Celsius.
NOTES TO EDITORS
About Seed Capital Assistance Facility
The Seed Capital Assistance Facility provides financial support on a cost-sharing and co-financing basis to low-carbon projects through partner private equity funds, venture capital funds and project development companies. After a successful initial Phase I, the Facility has launched a second phase.
The Facility’s second phase is implemented by UN Environment on funding contributed by the Department for International Development which leads the United Kingdom’s work to end extreme poverty, and by the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety, under its International Climate Initiative (IKI).
Technical support for the implementation of the Facility’s activities is provided by the Frankfurt School of Finance and Management group which acts as the Facility’s Agent and Trustee. The United Nations Office for Project Services provides operational support.
Visit: http://www.scaf-energy.org/
For more information, please contact:
UN Environment - Michal Szymanski, UN Environment News & Media, +254 715 876 185, unepnewsdesk@unep.org
UN Environment – Energy, Climate, and Technology Branch – Sophie Loran, Communications Officer,
+ 33 1 44 37 42 83, sophie.loran@unep.org
