Africa Go Green Fund (AGGF) [NDF C135]

Africa Go Green Fund for Renewable Energy and Energy Efficiency Investment (Africa Go Green Fund, AGGF) is the first dedicated energy efficiency fund in Africa.

Africa

Africa Go Green Fund (AGGF)

Ref. NDF C135

NDF Commitment: EUR 10 million
Project Period: 2021 - 2036
Partner Agency: KfW, AfDB, SEFA
Implementing Agency: Lion’s Head Global Partners

Africa Go Green Fund for Renewable Energy and Energy Efficiency Investment (Africa Go Green Fund, AGGF) invests mainly in energy efficiency activities in green housing, green transport and industrial energy efficiency sectors, as well as in green appliance businesses. In addition to energy efficiency, the fund invests in new solutions, enabling a higher share of clean energy in the energy system, such as battery storage and green hydrogen.

The main objective of the fund is climate change mitigation, and it is estimated to lead to a reduction of 3 million tons of CO2 equivalent during the lifetime of the fund. It will also have positive climate change adaptation and increased resilience co-benefits. Additional objectives include modernising energy, industrial, transport and housing sectors, improving the competitiveness of companies and economies, creating jobs as well as improving gender equality and enhancing the concept of gender mainstreaming.

AGGF is a private debt fund, providing various forms of tailored debt financing depending on the needs of the investee companies and projects. The target size of the fund is USD 200-250 million. The objective of NDF's investment in the junior tranche of the tiered structure is to mobilise commercial investment in the senior tranche and in the form of debt financing. The lifetime of the fund is 15 years. A long investment period will enable AGGF to reinvest a substantial share of the reflows from earlier loans back to new investee companies and projects. By reinvesting the capital during the investment period AGGF targets a total financing volume of at least USD 350 million.

AGGF is a pan-African fund focusing on West African countries. At least 60% of the investments will be allocated to West Africa and up to 40% to other regions. AGGF is accompanied by a Technical Assistance (TA) Facility which provides small grants to selected investee companies and projects to provide tailored support to their business development activities and capacity-building. These interventions also target broader market development impacts to enhance understanding of the benefits associated to energy efficiency, in addition to supporting individual investees.

1Sustainable Energy Fund for Africa, managed by the AfDB, to which NDF committed EUR 10 million in 2020 and which also has Denmark, Sweden and Norway, among others, as financiers.

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